Saudi Arabia’s Qurayyah power plant to be gas-fired

05 August 2010

Request for qualification to be re-issued in September

Saudi Electricity Company (SEC) has decided to change the primary fuel for the planned Qurayyah independent power project (IPP) from heavy fuel oil to gas.

As a result, the request for qualification (RFQ) to build the project - which was issued in June - has been withdrawn and an amended RFQ will be sent out in September.

A total of 16 companies responded to SEC’s first RFQ. They will need to resubmit documents for the amended RFQ to be considered for the project.

In the meantime, those companies that did not previously respond to the request for expression of interest (EoI) but would now like to do so are invited to submit an EoI by 11 August.

SEC originally invited expressions of interest in May, setting a deadline of 31 May. A total of 39 companies responded at this stage.

The fuel change is expected to set the project timetable back. SEC initially planned to evaluate RFQ submissions, compile a list of prequalified companies and issue a request for proposals (RFP) in August.

The winning bidder will build, own and operate the power plant, which will have a capacity of around 1,800MW. 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 power purchase agreement (PPA).

The PPA will need to be adjusted as a result of the fuel change. Originally, SEC was to supply heavy fuel oil and allocate the land for the project.

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.

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