Riyadh awards Ras al-Zour contracts

09 September 2010

Local/Chinese consortium wins power package and South Korea’s Doosan to build desalination plant

Saudi Arabia’s Saline Water Conversion Corporation (SWCC) has awarded contracts worth $4.18bn to build a power and water desalination plant at Ras al-Zour.

The local Al-Arrab Contracting Company and its Chinese partner Sepco III Electric Power Construction Corporation has won the $2.42bn contract to build the electricity generation component of the project.

The consortium submitted the cheapest option for the power component when bids were submitted in May. Competing bids were submitted by Arabian Bemco Contracting Company and Spain’s Iberdrola with an offer of $2.865bn; and South Korea’s Doosan Heavy Industries & Construction with a $2.911bn offer. South Korea’s Hyundai Engineering & Construction with the local Saudi Services for Electro-Mechanic Works Company entered a $3.7bn offer.

Planned desalination plants
PlantDesalination capacity (mg/d)Status as of March 2010
Yanbu 3121Design
Haql 32Design
Dheba 42Design
Rabigh 32Design
mg/d=Million gallons a day. 
Source: Saline Water Conversion Corporation

The combined-cycle power plant will have a capacity of 2,800MW when the three and a half year contract is completed in early 2014. Saudi Electricity Company (SEC) will take 1,050MW of the plant’s power output. Saudi Arabian Mining Company (Maaden) will take the remaining output from the plant.

Desalination plant

SWCC has also awarded the contract for the water desalination part of the project.

South Korea’s Doosan Heavy Industries & Construction has won the $1.76bn contract to construct a 228 million gallon a day (mg/d) hybrid plant combining multi-stage flashing and reverse osmosis technologies. Doosan originally submitted a bid of $1.79bn for a facility capable of producing 228 mg/d in multi-stage flashing and 68 mg/d in reverse osmosis.

Contracts worth $4.18bn to build a power and water desalination plant at Ras al-Zour have been awarded

It also submitted another offer of $2.03bn for 228 mg/d using multiple effect desalination and 68 mg/d by reverse osmosis.

Fellow South Korean company Samsung Engineering and Japan’s Sasakura Engineering Company put forward the lowest original offer of $1.67bn.

The group’s proposal was for 228 mg/d by multiple effect desalination and 68 mg/d using reverse osmosis.

Other bids were submitted by the local Arabian Bemco Contracting Company with Italy’s Fisia Italimpianti with a price of $1.87bn for 248 mg/d in multi-stage flashing and 68 mg/d using reverse osmosis.

France’s Sidem submitted a price of $2.03bn for a248 mg/d using multiple effect and 48 mg/d by reverse osmosis.

When completed in the fourth quarter of 2013, the desalination facility will be the largest of its type in the world producing 1 million tonnes-a-day (t/d) of water, enough for 3.5 million people. The water will be used to supply Riyadh.

SWCC will take 220 million g/d of desalinated water from the project and Saudi Arabian Mining Company (Maaden) will receive 6 million g/d of water from the plant.

The successful award of the Ras al-Zour project signifies the end of a long delay to tender the scheme. 

The Ras al-Zour project was originally launched as an independent water and power project (IWPP). In early April, the preferred bidder consortium, led by Japan’s Sumitomo Corporation, fell apart after Malaysia’s Malakoff International pulled out of the team and left it struggling to find a  replacement.

Contract change

The government then decided to implement the project on an engineering, procurement and construction (EPC) basis.

Sumitomo tried to salvage its bid even as the decision to convert the project to an EPC contract was made. Japan’s Kansai Electric Power Corporation was carrying out due diligence on the scheme and was due to complete it by the end of April. It was then to take a decision about joining the Sumitomo group.

The Ras al-Zour project was then merged with another plant to be developed with Saudi Arabian Mining Company (Maaden). As a result of the tie-up, the project was converted from an oil-fired facility to a gas-fired project. The Maaden power scheme had already secured its gas allocation from the government as it supported plans to build an aluminium smelter on the Ras al-Zour site.

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