Saudi Aramco has still not decided on the contracting strategy for the air separation unit (ASU)/oxygen supply package at the proposed $3bn-5bn gasification project at Jizan, in the southwest of the kingdom.

The state-owned oil company usually tenders gas supply contracts on a build-own-operate-transfer (boot) basis. However, it now may decide to release the tender as an engineering, procurement and construction (EPC) basis.

“There are not many companies who would be willing to make a financial commitment of over $500m to build an ASU and oxygen supply facility in somewhere as remote as Jizan,” says an oil and gas source working in Saudi Arabia. “Maybe only two or three companies would be able to afford to do it, and whether they would be prepared to take on that much risk is something only they know.”

Oxygen is a key component of the gasification process, but any new facility will also provide services to the $7bn Jizan oil refinery currently under construction.

MEED reported in May that the rest of the packages for the scheme, which are all EPC, had been released. The whole package list for the Jizan gasification scheme is:

• Air separation unit (ASU)/oxygen supply
• Combined-cycle power plant
• Gasification
• Offsites and utilities
• Sulphur recovery

The deadline for the rest of the packages has now been pushed back by almost a month to 11 September. The original date for submissions was 14 August.

“Contractors have said they need more time to formulate the bids so Aramco has pushed the deadline back,” says the oil and gas source.

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 2,400MW.

The plant will supply the $7bn Jizan Refinery Project with power and Aramco is also hoping it will attract new industries to the JEZ.

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.