Saudi Arabia in negotiations with contractor for Duba power project

13 September 2015

Integrated project will have a total capacity of 550MW

  • Client is in negotiations with low bidder, Spain’s Initec Energia
  • Project will proceed with solar component, with client having considered removing it due to higher cost

Saudi Electricity Company (SEC) is in negotiations with Spain’s Initec Energia for the Duba integrated solar combined-cycle (ISCC) power plant.

According to sources close to the project, SEC is in final negotiations and financial discussions with the Spanish firm for the ISCC, which will include a gas-fired combined cycle capacity of 485MW-550MW, and a solar output of 40-50MW.

MEED recently reported that SEC was considering dropping the solar element from the project due to the higher costs it will bring to the scheme. However, SEC is preparing to award the contract to Initec to build the plant with the solar component. It is understood there is a possibility that the contractor may take on some of the initial financing costs for the scheme.

The Duba scheme will have a total development cost of $660m and has a planned commissioning date of 2017.

Initec Energia submitted the lowest bid for the solar component on 9 July, and emerged as the low bidder for the overall project, having previously submitted the second lowest price for the combined-cycle element.

MEED reported in June that six groups had submitted bids for the main combined-cycle engineering, procurement and construction (EPC) component of the proposed Duba plant. Abener, which is part of Spain’s Abengoa Group, submitted the lowest bid of SR2.05bn ($547m) for the combined-cycle package.

Abener’s bid was 6.8 per cent lower than the SR2.2bn price submitted Initec Energia, the second lowest bidder. However, when combined with the solar component, Initec has now emerged as the lowest bidder for the overall scheme according to sources within the kingdom’s power sector.

Other bidders for the project include the local Alfanar Construction, Turkey’s Gama, and the local Al-Toukhi and National Contracting Company (NCC).

The client received technical bids for the EPC deal in November 2014. The commercial bid deadline was extended a number of times to allow contractors more time to work on submissions.

SEC had originally planned to develop the Duba 1 ISCC as an independent power project (IPP), but dropped these plans in early 2014 to proceed with tendering the scheme as a standard engineering, procurement and construction (EPC) contract.

SEC tendered the project as a combination of EPC and equipment packages.

In January, SEC awarded the US’ GE the original equipment manufacturer (OEM) contract for the Duba 1 project. GE’s order includes two F-class gas turbines, a steam turbine, generators, heat recovery steam generators, condenser, control system and long-term service agreements.

The Duba project is one of two ISCC schemes that SEC is planning to develop. Contractors are currently working on proposals for the 1,050MW ISCC power plant at the Waad al-Shamal industrial development in the north of Saudi Arabia. The proposed plant will have combined-cycle capacity of 1,000MW and a solar component of 50MW. The plant will use concentrated solar power (CSP) technology, with the client allowing the bidder to select whether to use parabolic trough, power tower or linear fresnel technology.

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