Ras Al Zour IWPP

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Saudi industrial growth is placing greater demand on power and water supplies. (Getty Images)

In addition, it is understood that financial closure for the estimated US $5.5 billion project will be delayed from Q4 2008 to Q1 2009.

The developer consortium will have a 60% shareholding in a special purpose company, the project company, and will build, own, operate and transfer the Ras Al Zour IWPP after a period of 20 years.

The remaining 40% shareholding in the project company will be owned by the public investment fund (32%) and SEC (8%).

Scope of work

The scope of work for the Ras Al Zour IWPP will include the following:

• Oil-fired turbines
• Steam turbines
• Heat recovery steam generator (HRSG)
• Desalination plant
• Balance of plant (BOP)
• Offsites & utilities

Original plans for the project were to utilise gas as the feedstock and produce 3000MW of power and 200mgpd of desalinated water.

Contax understands that WEC has subsequently reduced the plant's configuration following a royal decree promulgated in early 2006, which stipulates the usage of crude feedstock by all future coastal power plants to alleviate the strain on natural gas resources.

Given this, the IWPP will utilise Arabian heavy crude oil as its feedstock and produce 850-1100MW of power and 220mgpd of desalinated water.

Challenges

Current economic and market dynamics are questioning the validity and schedules of many of the energy projects within the GCC.

With the recession in buyer economies, desire for project owners to take advantage of perceived lower critical input costs and drive down EPC bid prices and project financing issues; key projects are being postponed and cancelled on a weekly basis.

The Ras Al Zour IWPP bidding timeframe has already been extended three times with participating companies seeking additional time from WEC. In addition, with the ongoing IWPP projects in the kingdom expected to put a strain on equipment suppliers and contractors, the shortage of financial and material resources is also believed to be of concern.

However, with the financing of the project gathering pace and high domestic demand for power that is expected to continue growing, Contax believes that the Ras Al Zour project has a high probability of moving forward.

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