Extension increases pressure on $7bn Jizan refinery scheme in southwest Saudi Arabia
State oil firm Saudi Aramco has extended the bid deadline for four of the engineering, procurement and construction (EPC) packages at the proposed $3bn-5bn gasification project at Jizan in the southwest of the kingdom.
MEED reported in April and May that most of the major packages had been issued to contractors and that the bid deadline was mid-August. However, that was pushed back to 11 September and has now been further extended.
The packages and their new submission dates are:
- Gasification unit extended to 23 October
- Sulphur recovery unit (SRU) and tail-gas treatment (TGT) unit extended to 9 October
- Combined-cycle power plant extended to 9 October
- Offsites and utilities extended to 9 October
The extension for the gasification plant will be seen as another worrying sign that the $7bn Jizan refinery scheme could be severely delayed.
There are worrying signs and there are positive signs, says a Saudi-based oil and gas source. There is no doubt that the gasification project is making some progress, but not as quickly as we would like.
The most worrying sign is that the tender for the air separation unit (ASU)/oxygen supply package on the project has still not been issued amid confusion as to what the exact contracting strategy will be.
The state-owned oil company usually tenders gas supply contracts on a build-own-operate-transfer (boot) basis. However, it is now expected to request that prequalified bidders submit proposals that cover the package on a boot basis as well as a conventional EPC basis.
The UK/Dutch Shell Group is providing the gasification and acid gas removal technologies and will also be providing engineering services on the scheme. According to Shell, the project will have the largest gas and residue gasification units in the world when completed.
The gasification process works by hydrocarbons, such as coal or heavy oil, being mixed with oxygen to produce synthesis gas (syngas). This is then used to fire a turbine and create power.
The scope of works for the entire project is the construction of an integrated gasification combined-cycle (IGCC) power plant, which will have a capacity of 4,000MW.
The US KBR is carrying out the front-end engineering and design (feed), as well as the project management consultancy (PMC) for the refinery and power plant.