Riyadh says Ras-al-Zour will be oil-fired

16 November 2006
The world's largest independent water and power project (IWPP) at Ras al-Zour will be oil and not gas-fired as originally planned, Water & Electricity Company (WEC) has confirmed. 'It will use crude feedstock,' says WEC president Omar al-Ghamdi. 'We hope to issue RFQs [request for qualifications] for the Gulf coast project in mid-December, and RFPs [request for proposals] in early 2007.'
With power generating capacity of 3,000 MW and desalination capacity of 220 million gallons a day (g/d), Ras al-Zour will be by some margin the largest IWPP ever built. When it was first announced by WEC in 2004, the multi-billion-dollar scheme had been allocated gas feedstock to be supplied by Saudi Aramco. However, a royal decree earlier this year stipulated that all future coastal power plants must use crude feedstock at a set price of $0.46 a million BTUs.

Oil fuel is not WEC's first preference. 'We prefer gas, as heavy crude feedstock would substantially increase the capital cost and impact on the electricity tariff,' Al-Ghamdi told MEED in late August. 'We would also have to consider splitting the project because the project financing

element would be too big.' Other sources close to the project say that the optimal power configuration for an oil-fired IWPP with desalination capacity of 220 million g/d would be about 1,500 MW. 'Building 3,000 MW is perfectly possible, but this would have a serious impact on the tariff as the costs would be considerably greater,' says one (MEED 1:9:06).

On WEC's second IWPP at Shuqaiq, the developer consortium led by the local ACWA Power Projects and comprising Kuwait-based Gulf Investment Corporation and Japan's Mitsubishi Corporation has now been ranked as preferred bidder for the 20-year build-own-operate concession. The signing of the key project agreements is due to take place by year-end (MEED 20:10:06).

The ACWA Power-led group had been the favourite to win Shuqaiq after submitting the lowest offers for both the electricity and water tariffs in late July.

The group's nominated engineering, procurement and construction contractor for both the power and desalination elements is Japan's Mitsubishi Heavy Industries. Commissioning of the first unit on the 850-MW, 47 million-g/d facility is scheduled for 2008 (MEED 4:8:06).

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications