Developers respond to Saudi Aramco power and steam enquiry

12 March 2012

Aramco plans to select qualified applicants by 22 April

Saudi Aramco has received 22 statement of qualifications (SOQs) to build three greenfield gas-fired electricity and steam plants in Saudi Arabia’s Eastern Province.

The projects will be located at Abqaiq, Hawiyah and Ras Tanura, and will have a total installed capacity of about 770MW of power and 2.95 million pounds an hour in steam output.

While the exact scope of the projects is being determined by Saudi Aramco, the facilities are likely to have the following capacities:

  • Abqaiq – 320MW and 1,200 thousand pounds an hour
  • Hawiyah – 130MW and 550 thousand pounds an hour
  • Ras Tanura – 320MW and thousand pounds an hour

The following companies responded to the SOQ along with five small players including companies from India and Turkey:

  • Acwa Power (Saudi Arabia)
  • IP-GDF Suez (UK/France)
  • Kepco (South Korea)
  • Marubeni (Japan)
  • Samsung C&T (South Korea)
  • Sumitomo (Japan)
  • Saudi Oger (Saudi Arabia) and Powertek Berhad (Malaysia)
  • JGC Corporation (Japan)
  • Itochu (Japan)
  • Qatar Electricity & Water Company (Qatar)
  • Tata Power (India)
  • Mitsubishi (Japan)
  • Tenaga Nasional Berhad (Malaysia)
  • Sembcorp (Singapore)
  • Sojitz Corporation (Japan)
  • Kharafi National (Kuwait)
  • Taqa (UAE) and National Power Company (Saudi Arabia)

The plants will be built as independent power projects (IPPs) on a build, own, operate and transfer basis, with the ownership of each project being transferred to Aramco 20 years after the start of commercial operations. Developers must submit proposals for all three projects to be eligible.

Each of the projects will convert fuel gas and feed water provided by Aramco into electricity and steam for sale to Aramco under an energy conversion agreement.

Aramco may participate in the equity of the project company and may hold up to 50 per cent of the voting and economic rights, with the remaining voting and economic rights held by the selected developer group. This represents a departure for Saudi Aramco as it has not taken an equity position in previous projects.

Each of the consortium members will be required to hold at least 20 per cent of the voting and economic rights held by the applicant in the project company upon its formation.

Aramco plans to select qualified applicants by 22 April and issue a request for proposals (RFP) on 23 April. Bids are to be submitted by 1 September and Aramco will award a contract for the three projects by 31 December. Financial close is scheduled to occur by 25 March 2013.

The selected developer will be required to construct the projects to meet the following project commercial operation dates:

  • Hawiyah: November 2015
  • Abqaiq: January 2016
  • Ras Tanura: March 2016

Saudi Aramco is advised in the projects by Germany’s Fichtner, the UK’s HSBC and law firm Dr. Waleed N. Al-Nuwaiser in association with White & Case.

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