Saudi Aramco has awarded Spain’s Tecnicas Reunidas (TR) the $1.7bn offsites and utilities package 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 TR was going to win the deal, which was retendered to contractors after the initial bids were deemed too high by the state-owned energy company.

TR says it will start work immediately on the project and a completion date of 2017 has been quoted.

The Spanish company is also working on the adjacent 400,000 barrel-a-day Jizan oil refinery and was awarded the hydrocracker/diesel hydrotreater in October 2012.

Two more announcements are expected for the gasification project shortly. Italy’s Saipem is expected to win the gasification unit and the sulphur treatment unit, and China’s Sepco is expected to pick up 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 (nNm3/h) of syngas.