The Saudi Electricity Company (SEC) is set to retender the contract to build the 2,000MW Rabigh 2 power plant.

A consortium led by the local Acwa Power was selected as the preferred bidder for the Rabigh 2 power plant in January. However, a decision in early May by Saudi Aramco not to supply the plant with heavy fuel oil (HFO) resulted in SEC changing the configuration to use gas.

“SEC has sent a letter to the original bidders stating its intention to issue a request for proposals (RFP) for the change in scope,” says a source close to the project. “The RFP is expected to be issued in the first week in July.”

Since making the decision to switch the configuration of the plant to gas, SEC had been in negotiations with Acwa Power about delivering the plant to the new specification, but the state electricity company has decided to invite fresh bids.

Five consortiums submitted prices for the original tender in October last year. A consortium of Abu Dhabi National Energy Company (Taqa) and Qatar Electricity and Water Company (QEWC) submitted the lowest bid, offering to build the plant for 7.42 hals a kilowatt hour (hals/kWh). Acwa Power, in consortium with the Mena Infrastructure Fund and Samsung C&T, was the second-highest bidder at 8.81 hals/kWh.

The other bidders for the project were the UK/French IP-GDF Suez, Japan’s Marubeni and Korea Electric Power Company (Kepco).

As a result of the change in fuel, the plant’s $2.2bn development cost is expected to drop significantly, to less than $1.5bn.  The decision to change the fuel for the Rabigh 2 plant is part of Saudi Aramco’s decision to no longer supply oil for power schemes, which it feels can be more lucratively exported.

It is not the first time Saudi Arabia has changed fuel allocations for power production. The Qurayyah power plant, which was also eventually awarded to Acwa, was originally envisaged as an oil-fired scheme, before being changed to gas, and subsequently back to oil.