Saudi Electricity Company (SEC) has invited developers to submit proposals for the Qurayyah independent power project (IPP) by 28 February.

The prequalifiers for the tender are:

• Acwa Power (Saudi Arabia)
• AES Corporation (US)/Saudi Masader Company for Water, Power and Gas (Saudi Arabia)
• General Electric (US)
• International Power (UK)
• Korea Electric Power Corporation (South Korea)
• Marubeni Corporation (Japan)
• Mitsubishi Corporation (Japan)
• Mitsui & Company (Japan)
• National Power Company (Saudi Arabia)/Abu Dhabi National Energy Company (UAE)
• Powertek Berhad (Malaysia) and Saudi Oger (Saudi Arabia)
• Sembcorp Utilities (Singapore)
• Suez-Tractebel (Belgium)
• Sumitomo Corporation (Japan)
• Tenaga Nasional Berhad (Malaysia)/Saudi Binladin Group (Saudi Arabia)

A maximum of two Saudi Arabian banks are allowed to back each bid and each Saudi Arabian bank can support up to two bids.

The power project was originally launched as an oil-fired facility when developers were first approached in May 2010. By August, SEC had taken the decision to change the fuel for the project to natural gas. A revised request for qualification (RFQ) was issued as a result. Companies that responded to the first RFQ were asked to resubmit their documents, while developers that missed the first round could enter expressions of interest for the gas-fired project by 11 August (MEED 5:8:10).

According to a source at SEC, it last month reviewed its decision to change the primary fuel for Qurayyah IPP from heavy fuel oil to natural gas. Sources at SEC indicated that the project could go back to its original form as an oil-fired project. However, this option has since been dropped.

The fuel debate hinted at an internal struggle within the government. Since 2006, the government has attempted to develop new power-generation facilities using oil-fired plants in order to free up more of its natural gas resources for export.

Saudi Arabia has since appeared to back away from this policy, starting with the power and water project at Ras al-Zour, which is now gas-fired. The announcement in August that the IPP could be gas-fired sparked further speculation that the government is altering its fuel policy.

The winning bidder will build, own and operate the combined-cycle gas turbine (CCGT) power plant, which will have a capacity of 1,800-2,100MW. The project company will be 50 per cent owned by the successful bidder and the remaining 50 per cent will be held by SEC.

Construction of the plant and associated facilities is scheduled to begin no later than August 2011 and the project commercial operation date is scheduled for June 2014. The IPP will be built next to SEC’s existing facility at the Qurayyah site. It will be the third project to be developed under SEC’s IPP programme.

A project company will be formed by SEC and the successful developer or developer consortium. It will sell its entire output to SEC under a 20-year power purchase agreement (PPA). SEC will supply gas to the Project Company on an energy conversion basis. SEC will source the required gas under a separate arrangement with Saudi Aramco.

The US’ Citigroup is financial adviser to the state-owned company in the tender, while the law office of Mohammad bin Saud al-Rasheed, in association with Baker Botts, is legal consultant. Germany’s Fichtner is technical consultant.