Saudi Aramco has managed to lower the budget of its planned integrated gasification combined-cycle (IGCC) power project at Jizan Economic City (JEC) in the southwest of the kingdom to about $8.5bn.

MEED reported in mid-March that the state-owned oil company had received new bids for the scheme to trim costs. Contractors were instructed to submit the new bids with two options. The first option was based on value engineering on the original scope.  The second option was a reduced scope based on a reduced capacity of about 3,000MW.

Sources now indicate the first option is likely to be the one that moves forward with the capacity now likely to remain at 4,000MW. This would make it the largest gasification project anywhere in the world.

The three packages and the remaining bidders on each scheme are:

Gasification

• Daelim Industrial (South Korea)
• Foster Wheeler (US)/Hyundai Heavy Industries (South Korea)
• Hyundai Engineering & Construction (South Korea)
• Saipem (Italy)
• Tecnicas Reunidas (Spain)

Sulphur recovery units (SRU)

• Daelim Industrial
• Hyundai Heavy Industries
• JGC Corporation (Japan)
• Larsen & Toubro (India)
• Saipem

Offsites and utilities

• Daelim Industrial
• Daewoo Engineering & Construction (South Korea)
• Tecnicas Reunidas

If, as indicated, Aramco decides to move forward with the 4,000MW plant, it will leave the two lowest bidders from the gasification and SRU packages in a good position to be awarded the scheme. The lowest bidder for the gasification package was Italy’s Saipem with India’s Larsen & Toubro the lowest for the SRU.

The lowest bidder from the original tender round for the offsites and utilities package was China’s Sepco Electric Power Construction Corporation. However, it was not invited to rebid.

Sepco is expected to be awarded power package after an initial tender of $1.8bn.This figure is about $700m below the second-lowest bidder, which led Aramco to secure the deal on a single-source basis.

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

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.

Saudi Aramco is expected to make a decision regarding the rebids by April with awards being made in May. The facility will be constructed adjacent to the $7bn Jizan Refinery Project, which is under construction.