Saudi Aramco has yet to sign a contract with China’s Shandong Electric Power Construction Corporation (Sepco) for the power plant package at its planned integrated gasification combined-cycle (IGCC) power project at Jizan Economic City (JEC) in the southwest of the kingdom.

Sepco was the lowest bidder for the power plant, with a bid of about $1.7bn. This was about $700m cheaper than the proposal from the second-lowest bidder, South Korea’s Hyundai Heavy Industries (HHI), and led Aramco to decide not to rebid the deal after the initial bids for other packages came in too high.

However, Sepco has now renegotiated the price and will execute the package for a figure believed to be in excess of $2bn. The contract is expected to be signed by 12 June.

“This is a most unusual step and it is not often that a contractor would renegotiate a higher price with Aramco,” says a source working for an international contractor.

Three other packages for the IGCC complex have now been awarded. MEED reported in April that Italy’s Saipem and Spain’s Tecnicas Reunidas were going to be awarded a total of three packages for the scheme.

Saipem picked up the gasification and sulphur recovery units, with the contractor carrying out the full engineering, procurement and construction (EPC) for both on a lump-sum turnkey (LSTK) basis.  Tecnicas Reunidas will execute the offsites and utilities contract in a deal worth $1.7bn.

In May, Aramco also awarded China Harbour Engineering Arabia a $550m deal for the water intake pipeline, water treatment facility and all accompanying pipelines. The tender for the air-separation unit (ASU)/oxygen supply package has been issued with  a bid deadline of 30 June.

In a bid to cut costs, the power plant’s capacity has been lowered to 2,400MW from the initial 4,000MW. The UK/Dutch Shell Group is providing the gasification and acid-gas removal technologies, and will also provide engineering services on the scheme.

The gasification process works by mixing hydrocarbons, such as coal or heavy oil, with oxygen to produce synthesis gas (syngas). This is then used to fire a turbine and create power. The gasification unit will produce about 2.1 million cubic metres an hour of syngas.

Aramco was not available for comment when contacted by MEED.