Saudi Arabia invites bids for Fadhili IPP

09 April 2015

Cogeneration plant will be developed jointly by Saudi Aramco and Saudi Electricity Company

  • Prequalified groups have until 31 August to submit proposals
  • Cogeneration facility is being developed jointly by SEC and Saudi Aramco
  • Client is planning to appoint a successful bidder in December 2015

A partnership of state oil firm Saudi Aramco and state utility Saudi Electricity Company (SEC) has invited prequalified groups to bid for the Fadhili cogeneration independent power project (IPP) in the Eastern Province of the kingdom.

Prequalified consortiums have until 31 August to submit proposals for the cogeneration project, which will be developed on a 20-year power water and steam purchase agreement (PWSPA).

The Saudi Aramco/SEC joint venture is planning to appoint the successful bidder in December 2015 and sign the offtake agreements with the winning group by 15 January 2016. The state firms are targeting to reach financial close for the project in March 2016.

The proposed IPP will have a total power capacity of between 1,200MW and 1,600MW and total steam and water production capacities of 3,190,000 pounds an hour and 768.8 tonnes an hour respectively.

The client has set a target of early steam production by 1 April 2018 and a planned initial commissioning date of 27 June 2019. The final commercial operation date is scheduled for 31 January 2020.

The project has fallen behind the original schedule, with the client having originally planned to issue tender documents in mid-September. The delay is believed to have been due to some design changes being requested by the client, according to sources in the kingdom’s power sector.

The gas-fired Fadhili power plant is being jointly developed by Aramco and SEC, with Aramco the offtaker for the steam and water components and SEC the offtaker for the produced electricity.

The client will create a project company to develop the IPP, with the client holding 50-60 per cent of equity ownership, and the successful developer holding the remainder.

The project is likely to include the construction of a 380kV substation to connect the power plant to the national grid. Operation and maintenance of the substation will then be transferred to SEC at the beginning of commercial operation. SEC will be responsible for the necessary upgrades for interconnecting the project to the grid.

The IPP will form a vital component of the Fadhili gas processing facility in the eastern province, which will be 100 per cent owned by Saudi Aramco.

MEED recently reported that Saudi Aramco has extended the bid deadline for construction tenders at the planned gas processing plant. After requests from contractors, the bid deadline has now been put back by two months to 15 June to allow more time to formulate bids.   

The budget for the Fadhili plant has also escalated and the initial $5bn estimates have been raised to about $6.5bn. Each package is expected to be valued at more than $2bn. Other work will be tendered in the future, including a large pipeline package.

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