Three bid for Arzew EPC

16 November 2001

Technical offers for the engineering, procurement and construction (EPC) contract on DEMA - the independent water and power plant (IWPP) at Arzew - were finally opened in Algiers in mid-November. The commercial proposals are scheduled to be opened on 18 December.

Of the 10 international groups that purchased the tender documents, just three submitted offers for the plant. They are a Japanese consortium of Itochu Corporationand Ishikawajima-Harima Heavy Industries (IHI); Canada's SNC Lavalin, with Weir Westgarth of the UK; and Enelpower of Italy. Itochu and Weir were among the five companies that prequalified for the contract last year, before it was retendered in August (MEED 31:8:01).

The plant, to be located on a 25-hectare site east of the GL2Z liquefaction complex at Arzew, is being co-developed by Black & Veatch Africa (BVA)and the newly established Algerian Energy Company (AEC), a joint venture between the state energy and power companies, Sonatrachand Sonelgaz. The developers are in negotiations with potential operators for the plant, which will use multi-stage flash technology.

The project is estimated to require total investment of around $300 million. The selected operator will take a 10 per cent stake in the plant, AEC will have a 20 per cent share and BVA will take the remaining 70 per cent. Construction is due to begin next June and is expected to take 24 months to complete. When it comes on stream, DEMA will be able to generate 300 MW of power and have a desalination capacity of 40,000 cubic metres a day (cm/d), with the potential for a further 20,000 cm/d at a later date.

The London branch of Japan's Fuji Bank, now part of Mizuho Financial Group, is the financial adviser.

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