Saudi Arabia to tender Fadhili IPP by end of October

08 October 2014

Project is being jointly developed by state oil and electricity companies

State oil firm Saudi Aramco and state utility Saudi Electricity Company (SEC) are expected to issue tender documents for the contract to develop the Fadhili cogeneration before the end of October.

According to sources close to the project, the Aramco/SEC joint venture is expected to issue the request for proposal (RFP) in the second half of October. The client had been planning to issue the RFPs to prequalified bidders in mid-September, but the process has been delayed.

The joint-venture client has shortlisted nine companies to bid for the project, after receiving expressions of interest (EOI) from 15 groups in early August. The submission date for bids is still expected to be January 2015.

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

It is planned that Aramco will use the steam to power its planned 1 billion cubic-foot-a-day (cf/d) Fadhili gas plant at the Fadhili oil field in the eastern province of the kingdom. However, according to sources close to the project, SEC and Aramco are still in discussion over whether plant production will be split into a separate power purchase agreement (PPA) and steam purchase agreement (SPA).

The IPP will have a power generation capacity of about 1,300MW to 1,500MW and will have a steam production capacity of about 2.25 million pounds an hour (lb/h).

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.

Aramco started the prequalification for the Fadhili gas processing plant in July, setting a submission date of 18 August for prequalification entries for the engineering, procurement and construction (EPC) contract.

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