Saudi Aramco has awarded Italy’s Saipem two packages worth a combined $3bn at its planned integrated gasification combined-cycle (IGCC) power project at Jizan Economic City (JEC) in the southwest of the kingdom.

MEED reported in early April that Saipem was going to win the two packages, which were retendered to contractors after the initial bids were deemed too high by the state-owned energy company. The packages are the gasification unit and the sulphur recovery unit, and Saipem will carry out the full engineering, procurement and construction (EPC) for both on a lump-sum turnkey (LSTK) basis.  

The award follows Spain’s Tecnicas Reunidas picking up the offsites and utilities contract in early May in a deal worth $1.7bn. China’s Sepco will also install the power plant.

In a bid to cut costs, the power plant’s capacity has now been lowered to 2,400MW from the initial 4,000MW. Contractors were instructed to submit two bids to cover each potential eventuality.

The UK/Dutch Shell Group is providing the gasification and acid-gas removal technologies, and will also provide engineering services on the scheme.

The gasification process works by mixing hydrocarbons, such as coal or heavy oil, with oxygen to produce synthesis gas (syngas). This is then used to fire a turbine and create power. The gasification unit will produce about 2.11 million normal cubic metre units an hour of syngas.