Infrastructure Middle East December 2014 by Infrastructure ME

ISSUE 010 | DECEMBER 2014

IN FocUS

tRANSPoRt

Protecting communications Benchmark project to protect shipping and trade

Solid fundamentals Alstom Transport’s growth blueprint

p14

p34

ANALySIS

coNStRUctIoN

cracking the strategy Mixed fortunes for the GCC petrochemicals sector

Project management Prioritising best practices

p18

p38

EXcLUSIVE INtERVIEw

StRUctURAL PAthwAyS HE Eng Essa Al Maidoor discusses civil engineering’s past, present and future

PLUS toP 10 gcc INFRAStRUctURE PRojEctS 2014

INTRODUCTION

Hard talk GROUP GROUP CHAIRMAN AND FOUNDER DOMINIC DE SOUSA GROUP CEO NADEEM HOOD GROUP COO GINA O’HARA

PUBLISHING DIRECTOR RAZ ISLAM raz.islam@cpimediagroup.com +971 4 375 5471 EDITORIAL DIRECTOR VIJAYA CHERIAN vijaya.cherian@cpimediagroup.com +971 4 375 5713 EDITORIAL EDITOR ANOOP K MENON anoop.menon@cpimediagroup.com +971 4 375 5473 CONTRIBUTING EDITOR ASHISH SARAF ashish.saraf@cpimediagroup.com +971 4 375 5495 SUB EDITOR AELRED DOYLE ADVERTISING COMMERCIAL DIRECTOR JUDE SLANN jude.slann@cpimediagroup.com +971 4 433 2857 SENIOR SALES MANAGER JUNAID RAFIqUE junaid.rafique@cpimediagroup.com +971 4 375 5716 SENIOR SALES MANAGER LIAM FIRKIN liam.firkin@cpimediagroup.com +971 4 375 5495 MARKETING MARKETING MANAGER LISA JUSTICE lisa.justice@cpimediagroup.com +971 4 375 5498 DESIGN ART DIRECTOR SIMON COBON JUNIOR DESIGNER PERCIVAL MANALAYSAY CIRCULATION AND PRODUCTION DATABASE AND CIRCULATION MANAGER RAJEESH M rajeesh.nair@cpimediagroup.com +971 4 440 9147 PRODUCTION MANAGER VIPIN V. VIJAY vipin.vijay@cpimediagroup.com +971 4 375 5713 DIGITAL DIGITAL SERVICE MANAGER TRISTAN TROY MAAGMA

nergy subsidies are often cited as the main reason behind the GCC region’s higher-than-average energy consumption. According to the World Bank, energy subsidies (including fuel, water and electricity) consume 10% of the region’s combined GDP of $1.64tn. The decline in oil prices is expected to have an impact on the budgets of GCC countries, especially those with high break-even oil prices. However, Kuwait, Oman and now the UAE have used the opportunity presented by falling oil prices to grab the issue by its horns, so to speak. They are talking about reducing subsidies to prevent their fiscal balances from taking a serious hit. In the UAE, Abu Dhabi has decided to introduce increased tariffs on electricity and water consumption (more details on page 6). MEED Projects, quoting Abu Dhabi Water & Electricity Company (ADWEC) statistics, noted that between 2012 and 2013, peak power demand (including exports) in Abu Dhabi rose 5.9% from 10,618MW to 11,243MW, while system peak supply of water also increased by 5.9% from 759MIGD to 804MIGD. Higher tariffs are expected to check growth in consumption, if not reduce it, enabling the emirate to save a significant amount in terms of subsidies. But that’s not all. To quote Ed James, director of analysis at MEED Projects, the introduction of higher tariffs in Dubai in early 2008 saved the emirate at least $2bn by ensuring it has not had to build new power and desalination facilities since. The money saved from subsidies can be better used to build social infrastructure. Speaking at ADIPEC 2014 last month, Mohammed bin Hamad al-Rumhy, Oman’s Oil and Gas Minister, acknowledged that energy subsidies are unsustainable in the long term. Prior to that, the FT reported Oman’s central bank governor admitting that the sultanate was considering how to reduce energy subsidies. Kuwait’s government is also looking at reducing petrol subsidies. However, it is important for governments to attack subsidies with a longterm plan. In Abu Dhabi’s case, tariff reform was preceded by a sustained education campaign which used utility bills to inform consumers whether they were in the ‘green’ ideal-average or ‘red’ above ideal-average. Given the strong economic linkages that have developed on the back of subsidised energy, any sudden reduction can give rise to stagflation risks. Rising prices and falling growth is something Gulf countries can ill-afford right now.

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December 2014

INFRASTRUCTURE MIDDLE EAST

At the 2014 Construction Machinery Show we sold 70 units and 100 more units are under discussion. We have delivered a positive message to our existing clients, our competitors, and grabbed new clients. I think gaining such an appreciation from all members in the construction equipment sector is a great honour and will encourage us to work very hard to keep the same level of style, image, and standards.”

This year the CM Show team delivered an exhibition Saudi deserves. For years, we have seen a vision in this Show and this year the vision was achieved. We wanted quality traffic and we saw equipment and company owners; and we were able to offer some promotions to entice sales. I saw an increase in our sales immediately. Our principles, Doosan and Everdigm, really enjoyed themselves. We anticipate the upcoming years to be even better.”

The Construction Machinery Show was perfect from an awareness point of view. We explained Roots Group Arabia’s capability of covering the construction industry with all of its needs and requirements. The attendance was good especially during weekdays and towards the end of the exhibition. See you next year.”

Al-Qahtani & Sons Khaled El Shatoury, Managing Director

Saudi Diesel Equipment Ahmed Alkooheji, Marketing Manager

Roots Group Arabia Abdulaziz Felemban, Brand Manager

Co-located with

Raz Islam Publishing Director raz.islam@cpimediagroup.com Mobile: +971 50 451 8213

Michael Stansfield Commercial Director michael.stansfield@cpimediagroup.com Mobile: +971 55 150 3849

CONTENTS

010 December 2014 30

CoVER SToRy

REgULARS

Structural Pathways

06 Regional update

HE Eng Essa Al Maidoor discusses civil engineering’s past, present and future Report by Anoop K Menon

Abu Dhabi revises utility tariffs; Qatar awards New Port contracts ALSO: BizBriefs

10 Global update China ups infrastructure spend; France okays GE’s acquisition of Alstom Power

12 In focus

Top 10 FEATURE

GCC infrastructure projects 2014 According to ARCADIS, the GCC region has some of the most dynamic infrastructure markets in the world today. From the lists featured in the past nine issues, we pick this year’s top 10

Powering telecom towers; Protecting communications

20 Bottom line matters 23 Infrastructure tenders 46 Executive insight Cutting variables

47 Events 48 Infrastructure milestones This month: Shindagha Tunnel

INDUSTRy SECToRS ANALySIS

oIL & gAS

18 Cracking the strategy

40 Serious play

TRANSpoRT

oIL & gAS

36 Solid fundamentals

42 The productivity proposition

Alstom Transport has invested in customer proximity, integrated product offerings and technology leadership to grow its rail business worldwide

Dan O’Brien, global director of production management, Honeywell Process Solutions, deconstructs the digital oil field trend

CoNSTRUCTIoN

oIL & gAS

38 Project management

44 Banking on experience

Mark Langley, president and chief executive officer of Project Management Institute on the best project management practices for public and private sector organisations

Asad Iqbal Khan, manager – Business Development, AES Arabia speaks about his company’s long innings in the region’s energy sector ALSO: ADIPEC 2014

Falling oil prices and the emergence of feedstock alternatives in the US spell mixed fortunes for the GCC petrochemicals sector

INFRASTRUCTURE MIDDLE EAST

December 2014

Rockwell Automation showcased its ability to deliver end-to-end projects for the oil and gas sector at ADIPEC 2014

regional UPDaTe

in May 2014, following which 24 developers were shortlisted. The list has been pruned down to 10. Phase two is expected to become operational by 2017.

UAE Abu Dhabi has revised its water and electricity tariffs effective from January 1, 2015 in order to encourage the efficient use of water and electricity in the emirate. Saif Al Qubaisi, acting director general, Regulation and Supervision Bureau (RSB), said: “The restructuring of tariffs will help drive understanding of the true value of water and electricity which, in turn, supports the sustainable growth of the Emirate of Abu Dhabi.” The tariff revision was preceded in March 2012 by the launch of new water and electricity bills to allow better understanding and at-aglance visibility of whether average usage is ideal – “in the green” – or above ideal – “in the red”.

Dubai Airport Dubai currently connects 149 cities with populations of over 1m people

From January 2015, consumption in the red will be subject to a higher tariff than consumption in the green. For the first time, nationals will be subject to water tariffs and will pay a higher electricity tariff for above ideal average consumption. Dubai Electricity and Water Authority (DEWA) has

shortlisted 10 bids for the 100MW Phase Two of the Mohammed bin Rashid Al Maktoum Solar Park. The bids will be reviewed according to the criteria developed by the advisory committee that oversees the project. DEWA received 49 qualification documents in response to its open request for qualifications released

special economic zone, and is expected to reduce the travel time between Muscat and the UAE.

Oman A prolonged decline in oil prices may force Oman to start cutting some state subsidies next year, according to Oman’s Minister for Financial Affairs, Darwish bin Ismail Al Balush. The country’s original budget plan for 2014 assumed the government would run a deficit with an average oil price of $85 a barrel. But according to the International Energy Agency (IEA), oil prices could fall further next year unless global output is reduced. Initially, fuel subsidies are expected to be targeted. At the same time, the minister assured that spending in the 2015 budget plan would be around the same level as in the 2014 budget, or marginally higher. Also, there are no plans to cut spending on the big infrastructure projects

INFRASTRUCTURE MIDDLE EAST

Aviation and tourism-related activities will contribute $53bn to Dubai’s economy by 2020, equivalent to 37.5% of the emirate’s GDP and supporting over 754,500 Dubai-based jobs. According to Oxford Economics, in 2013, the aviation sector contributed $26.7bn to Dubai’s economy – almost 27% of the emirate’s GDP – and supported a total of 416,500 jobs, accounting for 21% of the emirate’s total employment. Between 2014 and 2020, the aviation sector’s contribution to Dubai’s economy is expected to grow at a faster rate than the economy as a whole.

Central to Sohar Kuwait is partly financing the Batinah Expressway with a $1.75bn grant

crucial to Oman’s economic diversification strategy. Oman’s Ministry of Transport and Communications has tendered the eleventh package of Batinah Expressway, one of the biggest road projects in the country, which will extend Muscat Expressway to the Oman-UAE border. Most of the packages for the December 2014

265-km project, which is expected to cost over $3.9bn, have already been awarded, and several segments are getting ready. Oman’s Tender Board said documents for the eleventh package will be distributed until December 11, while the opening date will be January 19, 2015. The expressway is central to development of the Sohar Industrial Port and

Oman is planning to change the procedure for awarding concessions for mining, said the country’s minister of commerce and industry, Dr Ali bin Masoud Al Sunaidi. A report in the Times of Oman, quoting Al Sunaidi, said once the new mining law is in place, mining companies will have to participate in a competitive bidding process to get concessions. Also, production and export of minerals without any value addition will be discouraged. “The new law will try to look at value addition if possible, try to look at minerals, which we have in abundance,” he explained. Oman has been exporting marbles and chromite, while two major projects coming up in Sohar will produce ferrochrome using locally available chromite.

REGIONAL UPDATE

in 2016, with capacity for 2m containers annually. The Qatar Economic Zone 3 (QEZ3) will also be located near the New Port.

Qatar Qatar Public Works Authority (Ashghal) is planning to launch 80 new infrastructure projects across the country during the 2014-15 period, said the Peninsula. The newspaper said the Authority will concentrate on sewage infrastructure projects and surface and groundwater networks, as well as drainage operations and maintenance. According to Ashghal’s 2013-2014 annual report, of the ongoing 172 projects, three have been completed, 16 are under construction, 24 are in the tendering stage, and 129 are in the design phase. Of the 80 new projects, five will be coming up in the newer areas of the country. Ashghal has shortlisted

No oil shock Qatar’s low fiscal breakeven price is expected to shore up its growth spend

74 qualified firms to enhance the role of local companies in the implementation of roads, drainage and utility services. Qatar has awarded construction contracts totalling $4.22bn for its New Port project, targeted for completion by 2020. One of the country’s largest infrastructure projects, the

New Port will be built on a sprawling 26 sq km area at an estimated cost of $7.41bn. Local companies were awarded 53% of the total project works. To be developed in multiple phases, the New Port will comprise three container terminals with an eventual combined annual capacity in excess of 6m containers. The first phase is expected to be completed

Qatar’s large infrastructure investment programme will be sustainable even if oil prices fall considerably further, QNB Group said in a new report. “Based on 2013 data, we estimate that the fiscal breakeven price – the oil price at which government expenditure would equal government revenue – is $67,” the report said. Even if oil prices did fall below $67, they would have to remain depressed for some time to have an impact on the investment programme. With fiscal and current account surpluses of 15.6% and 30.9% of GDP respectively in 2013, Qatar has resources to draw on before being forced to make any significant cutbacks to domestic investment.

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regional UPDaTe

announced that it is acquiring 30% of Chevron’s holdings in Duvernay shale basin in Alberta, Canada.

Kuwait Dow Chemical Company’s shares in Kuwait will be handed out as initial public offerings (IPO) to Kuwaiti nationals, said a KUNA report quoting the CEO of Petrochemical Industries Company (PIC), Saad Asad. Earlier, Dow announced that as part of an $8.5bn divestiture plan, it would reduce its equity positions in all of its Kuwaiti ventures, in order to release capital for other strategic purposes. PIC and Dow’s key joint ventures include Equate, Kuwait Styrene Company (TKSC) and MEGlobal. The PIC CEO told KUNA that Dow’s move will not affect existing strategic collaboration between the two companies. He also denied that the disputed K-Dow affair had anything to do

Dow divestiture Equate is expected to list on the Kuwait Stock Exchange after its IPO

with the move. Last year, Dow received $2.2bn in damages from PIC after an international arbitrator ruled against the Kuwaiti firm for pulling out of a planned plastics joint venture in 2008. Kuwait Foreign Petroleum Exploration Company (KUFPEC) has signed a new $1bn, five-year term loan

facility which will be used for general corporate purposes and international expansion plans. KUFPEC is engaged in the exploration, development and production of crude oil and natural gas outside Kuwait. It is currently active in 15 countries with 63 projects in the international upstream sector. Recently, whollyowned subsidiary KUFPEC Canada

Metro, with $22.66bn worth of contracts awarded.

Saudi Arabia Saudi Arabia is aiming to double its natural gas output by 2030 to feed growing domestic demand. Speaking at a natural gas conference in Acapulco, the Kingdom’s Minister of Petroleum and Mineral Resources, Ali Al-Naimi, said the gas will be supplied to the country’s power generation, water desalination and mineral sectors. Saudi Arabia has the world’s fifth-largest natural gas reserves at 291tcf. “There was a time when the night skies of the eastern province of Saudi Arabia were lit up by the flaring of this gas,” he said. “No more.” The value of awarded contracts in Saudi Arabia declined during the third

INFRASTRUCTURE MIDDLE EAST

A consortium of Kuwait’s Kharafi National and Turkey’s Limak Holding has submitted the lowest bid for the Kuwait International Airport expansion project. The consortium submitted a bid of $4.8bn for the project, which involves the construction of a new terminal and runway, in addition to 30 gates to boost the facility’s capacity from the current 7m passengers to 13m in 2016 and 25m by 2025. Other bidders for the contract included China State Construction Engineering Corporation and Arabtec. Kuwait’s Public Works Ministry is expected to study the bids and pick the winner, with the contract signing expected to take place in the first half of 2015.

Capital spend A significant share of 2014 contracts went to the Riyadh region

quarter of 2014 after showing signs of recovery during the previous quarter, said a report by the National Commercial Bank (NCB). The report noted that about $9.14bn worth of contracts was awarded during Q3 2014. The value of awarded contracts in August slumped to $1.15bn, the lowest since April 2010. The major reason for the slowdown was December 2014

the absence of mega projects in the anchor sectors. The transportation sector accounted for 36% of Q3 value of awards, with the water sector following at 13% and the power sector at 11%. According to the report, the value of awarded contracts in 2014 is not expected to come close to 2013’s record of $78.09bn. The star project of 2013 was the Riyadh

Saudi Arabia will see 1.2m barrels per day (mbpd) of new refining capacity come online by 2020. This includes the Satorp refinery, which is already up and running, and the Yasref refinery, which will start up in Q4 2014. According to a report by Jadwa Investment, the three new, highly complex refineries will change Saudi Arabia’s refined product balance by 2020, but the degree of this change depends on the growth in domestic product demand. Instead of becoming selfsufficient, Saudi Arabia is expected to remain a net importer of light distillates up to 2020, with refined product demand growing at a faster rate than in the previous decade. The only comforting factor will be a reduction in the level of imports.

REgIoNAL UPDATE

Biz Briefs Abu Dhabi Marine Operating Company (ADMA-OPCO) has signed three major contracts for Nasr Full Field Development Project with National Petroleum Construction Company (NPCC), Hyundai Heavy Industries (HHI) and Technip, at an approximate total value of $3bn. In addition to Satah Al Razboot and Umm Lulu, Nasr is the third offshore hydrocarbon reservoir being developed by ADMA-OPCO under its strategy to increase production by 270m barrels per day from new fields. ADMA-OPCO also awarded a fourth contract, for EPC work for additional gas supply to onshore and flexibility assurance at Umm Shaif Super Complex, to NPCC at an approximate value of $494m. DP World has announced that it plans to acquire sister company Economic Zones World (EZW) for $2.6bn, and also take on $860m of EZW debt. EZW’s key asset is JAFZA, an operator and offshore business and logistics hub connected to DP World’s flagship Jebel Ali Port, and contributing 97% of EZW’s total revenue and operating profit. Should the transaction be approved by independent shareholders this month, DP World is expected to complete the acquisition in Q2 2015. According to Moody’s, while DP World and JAFZA will benefit from possible synergies given the strong linkage between the port and free zone, the acquisition will also increase DP World’s exposure to Dubai, and economic volatility in the emirate is likely to have a greater impact on the combined group’s financial performance. Industrial and Commercial Bank of China’s (ICBC) Doha

Jebel Ali Port JAFZA is an integral supply chain component of DP World’s customers

Branch has been designated as the RMB (Chinese yuan) clearing bank in the Middle East by the People’s Bank of China (PBOC). The Chinese and Qatari central banks also signed a $5.7bn currency swap deal, equal in size to a three-year currency swap agreement inked between China and the UAE in 2012. According to a Reuters report, in the long run the step could help GCC oil exporters reduce their dependence on the US dollar. As the Gulf’s trade and investment ties with China boom, the yuan is becoming increasingly important to the region. In 2013, the Gulf Cooperation Council (GCC) countries exported 39.5m tonnes of chemicals to Asia, with China accounting for the largest

share, according to the annual Facts & Figures report from the Gulf Petrochemicals and Chemicals Association (GPCA). The development of the manufacturing sector in China has increased demand for raw materials, including chemicals. As a result, GCC chemicals exports to China grew by an estimated 13% per year over the last 10 years, with nearly 60% of GCC chemicals and plastics export going to Asia. Dr Abdulwahab Al-Sadoun, secretary-general of the GPCA, said: “With US shale gas changing the global energy and petrochemical landscape, the relationship between the GCC and China is ever more important.” ABB has signed an MoU with the Dubai Electricity and Water Authority (DEWA) to develop a 277kW grid-connected

Big pact Carlos Poñe, CEO, ABB UAE & HE Saeed Mohammed Al Tayer, MD& CEO, DEWA

December 2014

rooftop solar photovoltaic (PV) pilot project at the company’s premises in Dubai. The MoU supports the Smart Dubai initiative launched by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to transform Dubai into the smartest city in the world. As per the MoU, the pilot project, which will connect to DEWA’s grid through a low-voltage distribution board at ABB, will be used as a learning tool for solar PV rooftop installations in Dubai. Dana Gas has announced a 36% increase in net profits for the nine months and third quarter period ending September 30. The company closed the quarter with a net profit of $129m, compared to $121m for the same period last year, on a 16% increase in revenue, which stood at $541m ($466m in the previous year). The recent Gas Production Enhancement Agreement commits the company to making significant new investments,which will result in higher production for Egypt and will allow Dana Gas to recover outstanding receivables within a defined period of time. Last month, Abu Dhabi Terminals (ADT), manager and operator of the first semiautomated container terminal in the Middle East, Khalifa Port Container Terminal, crossed the milestone of 2m TEU. The accomplishment represents a 20% year-on-year increase in containers handled by ADT at the container terminal since the port’s opening in 2012. ADT CEO Martijn van de Linde said: “Passing this latest record demonstrates the extremely robust position of [the] container terminal due to its diverse and increasing trade base, strategic location and significant hinterland connections.”

INFRASTRUCTURE MIDDLE EAST 09

GLOBAL UPDATE

Round Up In an effort to boost its slowing economy, China approved $113.24bn worth of infrastructure projects, Reuters reported, quoting Xinhua News Agency and other state media outlets. Overall, five airports and 16 railways will be built in an attempt to revive sluggish property investment. Xinhua cited falling sales and high inventory in the real-estate market as two reasons for the projects. China will also contribute $40bn to set up a Silk Road Fund – aiming to break the bottleneck in Asian connectivity by building a financing platform. An Asian Development Bank report estimates that Asia as a whole needs as much as $730bn per year in infrastructure investment before 2020. Last month, the French government gave its blessings to General Electric’s (GE) planned $15.6bn purchase of Alstom’s power business. The government also decided to buy a 20% stake in Alstom from its main shareholder, French conglomerate Bouygues SA. As part of the deal brokered by the French government, GE and Alstom will create three 50-50 joint ventures to manage the power equipment assets the French company isn’t selling to its competitor. Alstom stated that after completion of the transaction, the Group will focus on its transport business. New runways at Gatwick and Heathrow will cost billions more than the airports claim, meaning higher airport charges and possible higher fares for

010

INFRASTRUCTURE MIDDLE EAST

PM Tony Abbott Global Infrastructure Initiative (GII) is a major victory for Australia

passengers, said the Guardian, quoting a report published by the airport commission. The assessment, preceding the commission’s final public consultation round, found that Heathrow’s proposed third runway would cost £18.6bn, £3bn more than the airport itself estimated, while the independent Heathrow Hub plan to extend and split the northern runway would cost £13.5bn, £3.4bn more than estimated. Gatwick’s second runway would cost £9.3bn, not £7.4bn. According to the commission, Gatwick’s plan would disturb fewer people with noise and be the easiest option to construct, but the Heathrow plan would create more jobs. Events of the last year have increased many of the longterm uncertainties facing

the global energy sector, says the International Energy Agency’s (IEA) World Energy Outlook 2014 (WEO-2014). In the central scenario of WEO-2014, world primary energy demand is 37% higher in 2040, putting more pressure on the global energy system. But this pressure will be even greater if not for efficiency measures that play a vital role in holding back global demand growth. “A well-supplied oil market in the short term should not disguise the challenges that lie ahead, as the world is set to rely more heavily on a relatively small number of producing countries,” said IEA chief economist Fatih Birol. “The apparent breathing space provided by rising output in the Americas over the next decade provides little reassurance, given the long lead times of new upstream projects.”

Gatwick Airport UK is yet to finalise its airport expansion plans

December 2014

A global infrastructure hub proposed by G20 nations to help strengthen economic growth will be based in Sydney and funded by Australia. Prime Minister Tony Abbott told the Australian that the agency would not involve a new “international bureaucracy”, but would act instead as a clearing house for ideas on raising commercial funds for new public works, such as roads and railways. The hub has been one of Australia’s main proposals during its presidency of the G20 as the grouping looks for a 2% increase in combined growth over five years through economic reform and infrastructure investment. Abbott said: “This is not an entity in perpetuity. It’s an entity that will last for perhaps four years as an infrastructure financing and infrastructure ideas clearing house, but nevertheless it’s not a huge international bureaucracy.” Dubai-headquartered water industry leader Metito will make a significant investment in Thermal Purification Technologies (TPTec), a clean-tech company which has patented a Low Temperature Distillation (LTDis) technology. Metito will exclusively introduce and help develop LTDis in emerging markets, where the feasibility of desalination and the resources required for water and wastewater purification continues to be a challenge. Bassem Halabi, Metito Group Business Development director, said: “LTDis has the potential to redefine the practice of thermal desalination, as it not only offers advanced benefits over existing thermal and membrane technologies, but it also provides significant energy and cost savings compared to other technologies.”

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To learn how to reduce energy costs, visit: www.bentley.com/Reduce-Energy © 2014 Bentley Systems, Incorporated. Bentley and the “B” Bentley logo are either registered or unregistered trademarks or service marks of Bentley Systems, Incorporated or one of its direct or indirect wholly owned subsidiaries. Other brands and product names are trademarks of their respective owners. *Source: United States Environmental Protection Agency (2013)

IN FOCUS

HYBRID STRATEGY

Powering telecom towers Heliocentris’ clean energy-based value proposition for the telecom industry is starting to make headway. By Anoop K Menon ith GCC countries turning their attention towards energy efficiency, Germanyheadquartered Heliocentris has set its sights on being the solution provider of choice in the region’s rapidly growing telecom sector with its smart hybrid power solutions. “We provide energy efficiency solutions for telecom companies, whether it is a commercial operator or a Tetra operator,” says Michael Kutschenreuter, general manager of Heliocentris’ Middle East operations. “Our technology and know-how can save them more than 50% of their diesel consumption.” In its current roll-out-phase, the company is targeting base stations of mobile telecom operators in countries with poor or unreliable grid coverage in the Middle East, Africa and Southeast Asia. Kutschenreuter explains: “Most of the time, telecom companies operate their off-grid base stations and antennas using generators 24x7. But a generator is the most inefficient way of producing electricity, consuming as it does a lot of fuel while polluting the air with CO2 emissions. We have focused on the telecom industry because our solutions can save energy, fuel and money for the operators.” Heliocentris’ core offering is energy management software which monitors and optimises generator usage. The hybrid power solution entails the installation of deep cycle batteries in parallel with the generator to bring its 24-hour running time down to below 10 hours. During these 10 hours, the generator charges the batteries and runs the base station. Once they are fully charged, the generator is switched off and the batteries take over the base station power supply. “Our energy management software helps optimise the total usage of power sources at that site,” says Kutschenreuter. “We can also

OPEX SAVINGS

INFRASTRUCTURE MIDDLE EAST

Michael Kutschenreuter, GM, Heliocentris Middle East

add clean power components like solar and wind or even fuel cells to provide generatorfree, clean power solutions to the customer.” In the UAE, for example, du has decided to convert all its off-grid base stations to smart hybrid power by deploying Heliocentris’ solution. This is in alignment with the UAE government’s move towards sustainable energy and the national objective to reduce diesel consumption and CO2 emissions by 50%. According to Kutschenreuter, the 50% fuel savings apart, operators also save on capex as well because the generator runs for only 10 rather than 24 hours and therefore lasts much longer. Moreover, the maintenance cycle is also cut by two thirds, resulting in opex savings. IN NUMBERS

50%

Fuel savings claimed by Heliocentris for its hybrid power solutions

December 2014

However, Heliocentris is more than just a technology supplier. Globally, telecom operators prefer to focus on their core business of radio, outsourcing the capex heavy infrastructure – base stations and antennas – to specialised companies. “We not only deliver energy-efficient base stations, but also offer attractive opex concepts,” says Kutschenreuter. “We will operate the equipment for the customer, who pays us a monthly usage fee. This enables them to cut down their opex costs while reducing the equipment’s impact on their balance sheets.” In many countries, mobile operators are selling or spinning off their tower infrastructure into independent companies. The new ‘tower companies’ are potential customers for Heliocentris, as they too have to optimise energy usage by reducing maintenance and generator cost. The German firm recently acquired FutureE Fuel Cell Solutions, a leading integrator of fuel cell systems for applications in the telecoms sector. The acquisition will enable Heliocentris to develop fuel cell-based power solutions in stationary applications from 1kW to 20kW. The integration of Heliocentris’ energy management system into the fuel cell technology of FutureE will allow for significantly lower operating expenditure vis-à-vis solutions based on diesel generators at comparable acquisition costs. “We have seen a steadily growing interest from some of the leading telecom operators to combine different sources of sustainable energy, including fuel cells,” says Kutschenreuter. “We definitely have the right approach and technology to meet the high requirements in terms of security and availability for Tetra Networks, where we are able to provide completely clean energy solutions.”

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IN FOCUS

DEEP EXPERTISE

Protecting communications Qnective embarks on benchmark project for safer shipping and trade in the Middle East By Anoop K Menon n early September this year, Qnective Middle East announced that it had been awarded a contract, through its local partner AlMadakhel Investment, to design, build and operate a new shore-based maritime communications network for Oman. The project, the first of its kind in the region, is a major breakthrough for Zurichheadquartered Qnective, which provides sophisticated terrestrial and marine communication solutions and services, mainly for government and defence sectors. The company brings to the table deep expertise in wireless technologies, networking and highly-secure encryption mechanisms. Built upon the GMDSS (Global Maritime Distress and Safety System) Standard, the new communications network will enable Omani authorities to obtain additional important data regarding the identity, freight and itinerary of all vessels in the waters surrounding the country. “We have experience in building and operating maritime communication and surveillance infrastructure in other parts of the world,” says CEO and founder Oswald Ortiz. “In Oman, we will own the network and deliver services to the government for an operations fee. We will operate and maintain the network for a period of 15 years.” The importance of maritime communications networks for the region is immense, with an estimated 60,000 vessels a year passing through the Straits of Hormuz. “It is rather dense traffic through a very thin area, and this has to be monitored,” explains Ortiz. “Vessels need to be able to set up calls and be tracked and found during emergencies, or when under surveillance.” There have been incidents where ships in distress off Oman’s coast were unable to get help on time due to the country’s lack of coastal communications infrastructure.

INFRASTRUCTURE MIDDLE EAST

Oswald Ortiz, Founder & ceO, Qnective

The new maritime communications system will benefit roughly 15,000 active fishing boats and the new world-class port facilities along Oman’s coastline. business case

Apart from shipping activity, maritime communications networks also benefit the industrial and power and desalination complexes that tend to be located along the coast in this region. Ortiz says: “We can build a nationwide communications system that will serve different customers like port authorities, ministries and the coast guard. If they installed their individual communication systems, you in nuMbeRs

$200m

Qnective’s investment in Oman’s new maritime communications network

December 2014

would eventually end up with fragmented infrastructures that don’t talk to each other.” Qnective enters into rental agreements with telecom companies to use their existing infrastructure to install its own VHF, MF and HF radio infrastructure. The company also invests significantly in ground equipment for its build, operate and maintain projects. “In the case of Oman, we will be building 24 to 25 antenna sites,” says Ortiz. “We are building significant infrastructure, including an AIS system, which identifies and tracks vessels and further enhances the security of vessels at sea. All the fishing vessels in Oman will be equipped with trackers.” Ortiz expects to spend up to $200m in total in Oman, which is a fairly high amount for a company its size. The company will also have a Maritime Radio Communications Operations Centre (MROC) in Muscat to provide coastal surveillance services. All infrastructure is in accordance with International Maritime Organisation (IMO) standards. Qnective prefers to implement its solutions through local integrators that are trusted by the government. Ortiz explains: “The government doesn’t have to trust us, they have to trust our technology. They can go through the source code and check it line by line. Once satisfied, they get their own compilation, and the technology is installed by one of their partners in their premises.” Qnective also claims to be the only company providing a secure communication technology based on dynamic encryption. “All other solutions are session-based,” claims Ortiz. We exchange keys up to 16,000 bits every second, which is unique. Our solution works independent of carriers and backbones.” With its first account opened in Oman, the company is pursuing projects in Bahrain and Saudi Arabia, and has opened an office in Dubai. “We will enhance our activity in the infrastructure area,” says Ortiz. “We believe that we have a significant market here, given the type of business we are in.”

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AnAlysis

PETROCHEMICALS

Cracking the strategy Falling oil prices and the emergence of feedstock alternatives in the US spell mixed fortunes for the Gulf Cooperation Council (GCC) petrochemicals sector. By Anoop K Menon hile GCC petrochemicals revenues reached an all-time high of $89.4bn in 2013, the industry may be hard pressed to put up a repeat performance in 2014 and beyond. Oil prices in 2014 have reached their lowest levels in more than four years, which has caused concern about current and future petrochemical prices. The advantage of favourably priced feedstock enjoyed by GCC producers over the last 30 years is increasingly being challenged by the emergence of feed stock alternatives in other parts of the world, a fact acknowledged by the keynote speakers at the ninth GPCA Annual Forum in Dubai last month. For example, shale gas has already changed the long-term outlook for the US and the global gas markets, and the downward pressure it exerts on local gas prices has revived the US petrochemicals industry. “Downstream project economics are expected to be re-examined and reassessed as prices continue to fall and as future

INFRASTRUCTURE MIDDLE EAST

forecasts expect a new chapter in the history of oil prices,” said HE Dr Mohammed Saleh Abdulla Al Sada, Minister of Energy & Industry, Qatar, while delivering the plenary address at the GPCA Annual Forum. Lower naphtha prices linked to lower crude oil prices are of little benefit to the GCC petrochemicals industry, where ethane is the dominant feedstock. “Our industry has benefitted from a feed stock which has a fixed price [set by the government], so we are not utilising much of

“Downstream project economics are expected to be re-examined and reassessed as prices continue to fall” HE DR MOHAMMED SALEH ABDULLA AL SADA, MINISTER OF ENERGY & INDUSTRY, QATAR

December 2014

liquid naphtha-based feedstock in our portfolio,” explains Mohamed Al-Mady, chairman, Gulf Petrochemicals & Chemicals Association (GPCA), and vice-chairman and CEO, SABIC. Where contracts for finished products like olefins and polymers are linked to oil prices, lower oil prices actually squeeze the profit margins of producers. According to a recent report by Standard & Poor’s, while GCC producers like SABIC and Industries Qatar retain a large competitive advantage over naphtha-based crackers in Europe and Asia, the US shale gas boom and the American petrochemical industry’s resulting lower position on the cost curve has significantly changed the competitive landscape in ethane production. Incremental North American supply may hurt product pricing in key export markets over the next few years or longer. Moreover, oil and gas producers and refiners, and chemical companies operating in the US, have indicated they’re planning to build several new ethane crackers in the

AnAlysis

country, while additional gas allocation in Saudi Arabia and Qatar remains limited. Though some believe low international oil prices will put US shale oil producers out of business, the fact remains that thanks to their sunk costs, the incremental margins could continue even if international oil prices were to decline to the $30-40/barrel range, far below the $70-75/barrel threshold. Another big challenge for the GCC petrochemicals industry is the coal-tochemicals technology being developed by China, their biggest export market. “China’s coal-based polyethylene could boost its plastics industry and become a relatively low-cost alternative to products from our region or those produced using American shale gas,” said Al-Sada. Moreover, the slowdown in China, where economic growth is expected to slip to 7.2% this year, will put pressure on the GCC’s petrochemical exports to that country. But there are other risks as well. As the S&P report notes, the fall in oil prices and resultant pressure on government budgets is likely to bring the issue of energy subsidy reforms to the fore, likely resulting in higher feedstock costs for commodities producers in the region over the coming years. PREPaRINg foR chaNgE

As the advantage of favourably-priced feedstock gets eroded, the petrochemicals industry will have to fine-tune its strategy and existing business models to retain its competitive edge. “In the current economic environment, we expect success to come to those companies that generate innovative products, services, processes and business models to gain competitive advantage,” says SABIC’s Mohamed Al-Mady. “My best advice is participate where you find the feedstock and be an active player, rather than merely manufacturing at home and exporting.” SABIC has announced several initiatives to take advantage of changing feedstock dynamics, which includes modifying its existing cracker in the UK to handle shale gas imported from the US and working on the world’s first oil-to-chemicals facility, expected to be set up in the Kingdom. He points out that two major trends for the industry and its stakeholders to factor in going forward are shorter time frames when it comes to leveraging established competitive advantages or reacting to unforeseen events; and the power of big data. “Big data is indeed with us with its blessings and challenges. Those who are able to harness

hE Dr Mohammed Saleh abdulla al Sada Minister of Energy & Industry, Qatar

its power or attract those able to do so will be well positioned to shape the future.” In his speech, Al-Sada underlined the need to develop the region’s innovative capability to revitalise the petrochemical industry’s overall competitiveness. “In 2012, the GCC petrochemicals industry invested $318m on R&D initiatives, which constitutes a 30% increase over 2011. This growth percentage is higher than the 10% global average R&D expenditure, but is it all going in the right direction? Our region’s spending is less than 1% of the global industry total, while our patents are 0.4%. Altogether, 75% of the industry R&D spending in the region is IN NUMBERS

7.3%

Growth in GCC petrochemicals industry revenues between 2012 and 2013

50%

Growth in GCC petrochemicals production capacity by 2020

25%

Percentage of industry R&D devoted to new chemistry

geared towards maintaining and advancing existing technologies, while the remaining 25% is invested in new chemistry. I believe that time has come for this to change.” In his co-keynote address, Khalid Al Falih, president and CEO of Saudi Aramco, made a strong case for feedstock diversification, pointing out the industry should look at tapping the region’s plentiful supply of alternative liquid feed stock, instead of relying on ethane alone. “I believe that we shouldn’t think of these feedstocks as mutually exclusive choices, but rather view them as a mixed pool of feedstock that can be used to leverage each other,” he said. “Liquids are more versatile than pure ethane and, when used in mixed feed crackers, offer a broader product slate, including opportunities to produce specialty chemicals, which in turn can help spawn new industries and consequently many new jobs.” Saudi Aramco’s business strategy of integrating refineries and petrochemicals is best exemplified by Sadara, its joint venture with Dow, which will be the first chemical complex in the GCC to crack naphtha when it is commissioned next year. “It would generate enormous additional value if we pursued opportunities to restructure and upgrade these legacy assets, some of which are fully depreciated and offer limited added value to local economic development and profitability of companies in the future,” he said. “This retrofit would include changes to the feedstock mix, deployment of more energy-efficient technologies and the addition of high-value specialty products. But to succeed in specialties, we will need to leapfrog in knowledge intensity and accelerate our innovation engines.” It is obvious that availability of feedstock, inherent economies of scale and large investments have helped create a compelling success story in the GCC petrochemicals industry, which is today the second largest manufacturing sector in the region, producing $100bn worth of products annually. But for the industry to keep its leadership, it needs to capitalise on existing opportunities by leveraging technical expertise and expanding its global footprint. Additionally, the industry needs to proactively tackle emerging issues – global trends affecting the use of petrochemical products, the pursuit of energy efficiency, the development of new sources of feedstock and the delivery of upcoming projects – in a timely and cost-effective manner. December 2014

INFRASTRUCTURE MIDDLE EAST

CASE STUDY

Bottom Line Matters

Helping you make the smartest decisions

TESTING SUCCESS

World-class type testing is now a local reality, as the successful experience of Elastimold, ABB Kabeldon and Ducab HV attests. Read on... ecently, Elastimold, ABB Kabeldon and Ducab HV successfully completed a type test of a 132kV cable system at the Ducab HV test facility in Dubai. The test, in accordance to IEC 60840 standards was independently witnessed by KEMA, Netherlands. “The type test is ultimately a test of all cable system components, not just the cable” says Mally Clarke, Manager - Cable Accessories, Elastimold. “Type tests are performed in order to assure the long term performance of the accessory and cable combination. Longevity of the cable system is critical for all utility companies.” Type testing of cables and cable accessories is a mandatory requirement

INFRASTRUCTURE MIDDLE EAST

to do business with GCC utilities. “No utility in the region will accept a cable system including the joints and terminations (accessories) without a type test complying with IEC standards and local standards, if any,” says Clarke. “Hence, not doing a type test is simply not an option.” This is an important milestone for the region’s cable industry because it counters a widely prevalent view that such type testing is the domain of European laboratories, and is a testament to the development of local capabilities in this area “Our high voltage lab is the most advanced of its kind in the region,” says Engineer Aqeel Mohammed Aqeel Al Awady, Assistant Manager – Test, Ducab HV. “We have the capability to type test cable systems up to a rated voltage of 420kV. In fact, it is the only lab

December 2014

in the Gulf region that can go up to 420kV.” But why type test cable systems in the first place? As a critical part of the electricity infrastructure which connects power plants to end-users, cable systems are expected to stand the test of time, performing efficiently and reliably in all climes. All cable system suppliers are required to pass type tests to ensure that the performance level meets the requirements of IEC standards drawn up by an independent international body of experts. The cable and cable accessories can be tested as separate components or as a system. But utilities have always insisted on a system test for the highest voltages, to ensure clear accountability for the system performance. “In the approval process, the interfaces between the components are also considered,” says Clarke. “Incompatibility between the

CASE STUDY

different materials and interfaces can be disastrous because significant differences in properties could have a detrimental effect on performance and could lead to breakdown. In fact, cable accessories are acknowledged as the weakest point of the cable system, because they are assembled on site as opposed to a factory environment.” GROUND CONDITIONS

It is important that type tests simulate operating conditions to ascertain whether the cables and cable accessories are fit for purpose. The main standard for 132kV cable is IEC 60840, which covers high voltage cable systems up to and including 170kV. The IEC standards are often augmented by additional tests specified by the utility to meet their particular system requirements. “The fact that most cable-related R&D takes place outside the Middle East makes this practice all the more important. IEC sets the minimum performance requirements, but local site conditions like high water table, high salinity, extreme heating and cooling of the desert, are among the most challenging for underground cable systems,” says Al Awady. “The most difficult test is probably the joint immersion test in a saline solution, under pressure” adds Clarke. “Inside the lab, we can stress the system significantly more than in real operation, by combining thermal cycling and electrical testing. This gives us visibility into long-term performance as our customers expect the cable system to last 30 to 40 years or even more.” To carry out electrical tests, the Ducab HV lab has a 600kV AC test set and a 1.9MV impulse generator, as well as advanced equipment for measurement of partial discharge, tan delta and resistance. For

IEC 60840 stipulates the tests that need to be done for high voltage cables

non-electrical tests, the lab has advanced analytical equipment such as Fourier Transform Infrared Spectroscopy (FTIR), Thermal Gravimetric Analysis (TGA) and Differential Scanning Calorimetry (DSC). Ducab HV also uses the facility as a centre of excellence for specialised training in cable system technology. The IEC standards stipulate the tests that need to be done for a particular type of cable as well as the methodology. However, the results aren’t interpreted strictly in black and white. The results are analysed to get insights into site, lifetime of the cable, materials and accessories and the overall compatibility of the cable system. The manufacturers can use the test results as a feedback mechanism to improve their products, while utilities can take benefit of these insights for developing technical specifications. For high voltage cable projects time is

(LtoR) Eng Aqeel Mohammed Aqeel Al Awady of Ducab HV with Mally Clarke of Elastimold

always critical and getting type tests done locally rather than overseas provides an advantage to all concerned parties. “The actual tests take approximately one month but the test installation and preparation can double the time” says Al Awady. “Shipping cable takes time and stationing engineers at an overseas site for the test period is a costly proposition.” “From a manufacturer’s perspective, the benefit is mainly compression of time,” says Clarke. “If you opt for the best labs overseas, you are on a waiting list that can stretch to over a year. But that is too long because we actually won a project based on the fact that we can do a type test in a very short period.” In the past, overseas cable manufacturers dominated the local market. However, the market now favours local cable manufacturers due to their cost advantages, provided they meet the stringent quality requirements. This has created a market opportunity for independent cable accessory manufacturers like Elastimold and ABB Kabeldon to partner with local cable manufacturers like Ducab HV to provide a world class cable system solution. “Choosing the right partner is important for Elastimold and Kabeldon because both partners must have complete confidence in each other’s quality and reliability” says Clarke. “We completed the 132kV type test from the start point to the end point without any issues, using the Ducab HV facility gave significant time and cost savings. Having a lab in the region also provides an economic opportunity for our customers to send engineers to gain knowledge and experience.” December 2014

INFRASTRUCTURE MIDDLE EAST

MIDDLE EAST INFRASTRUCTURE TENDERS

Infrastructure Tenders Our monthly analysis of new tenders and key projects across the region

oLEFINS 3 PETRoChEMICALS PLANT PRojECT

hASSyAN CoAL-FIRED PowER PLANT - PhASE 1

BAhRAIN INTERNATIoNAL AIRPoRT ExPANSIoN

PTA & PET CoMPLEx PRojECT - SohAR PoRT

BUDgET: $10,000,000,000

BUDgET: $4,000,000,000

BUDgET: $1,000,000,000

BUDgET: $600,000,000

Territory: Kuwait Client Name: PIC (Kuwait) Description: Engineering, Procurement and Construction (EPC) contract t for the development of a Petrochemicals plant Period: 2016 Status: New Tender

Territory: UAE Client Name: Dubai Electricity & Water Authority (DEWA) Description: Construction of a coal-fired power plant with capacity of 1,200 MW in Hassyan Period: 2020 Status: New Tender

Territory: Bahrain Client Name: Bahrain Airport Company (BAC) Description: Increase passenger capacity of Bahrain Airport to 13m/ year a year from the current 9m/year. Period: 2018 Status: New Tender

Territory: Oman Client Name: Oman Oil Company Description: EPC contract to build to build a PTA plant with capacity of 1.1 MTPA and PET plant with capacity of 500,000 TPA Period: 2015 Status: New Tender

December 2014

INFRASTRUCTURE MIDDLE EAST

MIDDLE EAST INFRASTRUCTURE TENDERS

Top Tenders UAE DUBAI ExPo 2020 METRo LINE PRojECT Project Number: MPP2913-U Client Name: Roads & Transport Authority (RTA) Address: Marrakech Road, Dubai Phone: (+971-4) 284 4444 Fax: (+971-4) 290 3380 Website: www.rta.ae Description: A joint venture of the US’ Parsons International and France’s Systra was awarded the preliminary contract to complete the preliminary engineering for the new metro line that will serve the Dubai Expo 2020 site, located next to Al-Maktoum International Airport. The link is expected be a standalone system, meaning it could operate using different rolling stock and systems to the existing lines. The extension is expected to align along a utility corridor next to the existing Nakheel Harbour & Tower Metro Station, which runs between the Jumeirah Islands and the Discovery Gardens developments. The line will then pass through DIP and Greens Community before connecting to the expo site Status: New Tender Tender Categories: Public transportation

TACAMooL PETRoChEMICALS CoMPLEx Project Number: MPP2250-U Client Name: Abu Dhabi National Chemicals Company Address: Al Bateen Towers C-1, 11th Floor, Abu Dhabi Phone: (+971-2) 411 0000 Fax: (+971-2) 435 9259 Website: www.chemaweyaat.com Description: EPC contract for

INFRASTRUCTURE MIDDLE EAST

the development of Tacamool petrochemicals complex, comprising a combination of olefin, aromatics and fertiliser production facilities. The project is still under FEED study, which is expected to be completed in the first quarter of 2015. Bid announcement for the EPC contract is expected to be made in the second quarter of 2015 Status: New Tender Tender Categories: Industrial & Special Projects

AL-DABBIyA oIL FIELD DEvELoPMENT PRojECT - PhASE 3 Project Number: MPP1410-U Client Name: Abu Dhabi National Oil Company (ADNOC) Address: Next to Hilton Hotel, End of Corniche Road, Abu Dhabi Phone: (+971-2) 602 0000 Fax: (+971-2) 602 3389 Website: www.adnoc.ae Description: The project involves an EPC contract for the development of an onshore field in the North East Bab Asset. Bids have already been received for the EPC contract. Last month, the Netherland’s BAM International was awarded a contract to build the marine infrastructure works on this scheme Status: New Tender Tender Categories: Gas processing & distribution

KSA kINg ABDUL AzIz RoAD DEvELoPMENT PRojECT INFRASTRUCTURE woRkS Project Number: WPR455-SA Client Name: Umm AlQura for Development &

December 2014

Construction Company Address: Makkah, Saudi Arabia Phone: (+966-2) 530 0888 Fax: (+966-2) 539 0050 Website: www.kaar.com Description: The project is being developed along a section of the King Abdul Aziz Road (KAAR) development in Makkah, near the Haram and Jabal Omar development. Scope of work entails building roads and general infrastructure. The design and build contract also includes tunnels and two station boxes that will be used for the upcoming Mecca Metro project. The two companies short-listed for the main contract are the local Huta Group and Nesma & Partners Construction Status: New Tender Tender Categories: Roads, Bridges & Infrastructure

rehabilitation of offshore oil and gas facilities to maintain production. The contract will run alongside the Maintain Potential Programme (MPP), which is a long-term contract for engineering, design and project management of Aramco’s offshore operations. Client has extended the deadline to end-November 2014 for the long-term contract it is planning to award to four EPC contractors. The duration of the contract will be five years, with the option of a three-year extension. Bidders include India’s Larsen & Toubro (L&T), the US’ McDermott, the UAE’s National Petroleum Construction Company (NPCC); and Italy’s Saipem Period: 2020 Status: New Tender Tender Categories: Gas Processing & Distribution; Oilfields & Refineries

oFFShoRE oIL & gAS FACILITIES MAINTENANCE PRojECT

oBhUR CREEk CRoSSINg PRojECT

Project Number: MPP2944-SA Client Name: Saudi Aramco Address: Dhahran 31311 Phone: (+966-3) 872 0115 Fax: (++966-3) 873 8190 Website: www.saudiaramco.com Description: The project involves an EPC contract for extensive

Project Number: MPP2947-SA Client Name: Jeddah Development & Urban Regeneration Company Address: Al Maadey Street, Jeddah 21481 Phone: (+966-12) 614 2166 Fax: (+966-12) 614 0642 Website: www.jdurc.com

MIDDLE EAST INFRASTRUCTURE TENDERS

a flare gas recovery unit comprising coolers, drums, piping works and separators. AMEC has been awarded a contract to carry out the FEED study. The Invitation to Bid for the EPC contract will be issued in the fourth quarter of 2014 Status: New Tender Tender categories: Gas Processing & Distribution Oilfields & Refineries

oMAn Description: The project involves design and construction of a concrete arch bridge, 380 metres long and 75 metres wide, comprising eight lanes for road traffic, a single railway line and two sidewalks. The scheme is expected to be split into five packages, with the main package covering design and construction of a concrete arch bridge. The client is preparing to invite companies to prequalify for the work. Figg has prepared the preliminary design, while AECOM is providing programme management services on the project Status: New Tender Tender Categories: Roads, Bridges & Infrastructure

QATAR

and the New Doha International Airport. Each bridge section will be connected to an immersed tube tunnel 8km in length. The crossing will consist of an expressway with six lanes in total, with three lanes in each direction. It is understood that Belgiumâ&#x20AC;&#x2122;s Besix is among a group of firms to have entered the pre-qualification stage for one of the main packages on this project. Besix is leading a joint venture of four contractors for the sub-sea tunnels package. Contractors have submitted a second set of prequalification documents on October 18, 2014. Names of companies are yet to be revealed Status: New Tender Tender Categories: Public Transportation Projects Roads, Bridges & Infrastructure

BULk LIqUID BERThS PRojECT - PoRT oF DUqM Project Number: ZPR1363-O Client Name: SEZAD Address: Al Mashriq 113 Bldg., Block 248, 70 Street, Muscat PC 103 Phone: (+968) 2450 7500 Fax: (+968) 2458 7400 Website: www.duqm.com Description: EPC contract to build bulk liquid berths at Duqm port. The scope of the contract includes marine works, pipelines, loading

arms, control systems, workshops and associated infrastructure works. Last month, Worley Parsons was awarded the contract to provide FEED services for the project. The company will provide consultancy services covering the Project Definition and FEED, as well as project management and supervision services during the construction of the new Liquid Bulk Berths. By the middle of 2015, a tender will be floated for the execution of the marine and reclamation aspects of this project, which will be followed by a contract award for the jetty construction before the end of the 2015 Status: New Tender Tender Categories: Marine Engineering Works & Seaports

PRodUcEd In ASSocIATIon WITh MIddlE EAST TEndERS

DohA BAy CRoSSINg (ShARq CRoSSINg) PRojECT Project Number: ZPR096-Q Client Name: Ministry of Municipal & Urban Planning Address: Al Kornish Street, Doha Phone: (+974) 4426 6666 Fax: (+974) 4426 5689 Website: www.baladiya.gov.qa Description: : The project involves the construction of a 12-km crossing at Doha Bay. The crossing will include three separate bridge sections, which meet at three different points. The bridge will meet at Lusail development, West Bay

KUWAIT MINA ABDULLAh FLARE gAS RECovERy UNIT PRojECT - U01 Project Number: MPP2588-SA Client Name: Kuwait National Petroleum Company (KNPC) Address: Imad Commercial Centre, Safat 13001 Phone: (+965) 2244 7477 Fax: (+965) 2244 7492 Website: www.knpc.com.kw Description: EPC contract to build

December 2014

INFRASTRUCTURE MIDDLE EAST

TEN GCC iNfrasTruCTurE PrOJECTs

GCC 2014 infrastructurE PROJECTS According to the ARCADIS Global Infrastructure Investment Index, the GCC region has some of the most dynamic infrastructure markets in the world today. From the lists featured in the past nine issues, we pick this yearâ&#x20AC;&#x2122;s top 10 26

INFRASTRUCTURE MIDDLE EAST

December 2014

SADARA ChEMICAL CoMpLEx

Owner: Sadara Chemical Company Budget: $20bn Progress: 70% complete The Sadara project in Jubail Industrial City II is the worldâ&#x20AC;&#x2122;s largest integrated chemical complex to be built in a single phase. Comprising 26 world-scale manufacturing units, the complex includes a world-scale cracker that will be able to crack a wide range of liquid feed stocks. The complex will eventually produce more than 3m MT of valueadd performance plastics and specialty chemical products, targeted at the rapidly growing sectors of energy, transportation and infrastructure. Sadara is on track to deliver its first products in the second half of 2015, with the complex in full operation in 2016. Many of its products, such as isocyanates and polyols, will be produced for the very first time in the Kingdom.

TEN GCC iNfrasTruCTurE PrOJECTs

MAKKAh MASS RAIL TRANSIT SySTEM

AL MAKToUM INTERNATIoNAL AIRpoRT

Owner: Makkah Mass Rail Transit Company Budget: $16bn Progress: Invitation to Bid

Owner: Dubai Airports Budget: $32bn Progress: To be announced

Owner: Kuwait National Petroleum Company (KNPC) Budget: $14bn Progress: RFQ stage

Dubai Airports recently announced a $32bn expansion plan for Al Maktoum International at Dubai World Central (DWC), which will ultimately accommodate more than 200m passengers a year. The development is anticipated to be the biggest airport project in the world and will be built in two phases. The first phase includes two satellite buildings which will collectively be able to accommodate 120m passengers a year and receive 100 A380 aircraft at any one time. The entire development will cover an area of 56 sq km and will take between six and eight years to complete. Tendering work on the project is expected to start next year. A team of Lebanonâ&#x20AC;&#x2122;s Dar Al Handasah and Franceâ&#x20AC;&#x2122;s ADPI has completed the concept design of the new terminal.

The project originally involved an EPC contract to build an ecologically friendly new refinery with capacity to produce 615,000bpd, including kerosene and diesel, at Shuaiba. KNPC recently announced that it intends to merge this project with a planned petrochemical project in the same area to create an integrated refining complex. However, the combined value of this complex is yet to be announced. Meanwhile, with regard to the refinery project, KNPC has extended the deadlines to January next year for Package 1, which covers the main process units; Package 2, which covers support process units; and Package 3, which covers utilities and off-sites. The deadline for Package 4, which covers the tank farm, has been set for November. There has been a request from one of the prequalified companies to delay the bid deadlines for Package 5, which covers the marine facilities.

The Makkah Mass Rail Transit Project (MMRT) is the centrepiece of the Makkah Public Transport Project, which also includes bus rapid transit, express bus, feeder bus and associated infrastructure. The metro consists of four lines with a total length of 188km, served by 88 stations to be built in three phases. Bids have been received from the 10 shortlisted consortia that were invited to bid for Phase 1, which has been split into two civil construction packages. Package 1, for Line B, comprises 46km of track and 12 stations. Package 2, for Line C, involves 20km of track, 10 stations and depot civil works. The contract also covers MEP works. The rail systems package will be tendered separately. The client is also planning to tender two project management contracts.

NEw REFINERy pRojECT

December 2014

INFRASTRUCTURE MIDDLE EAST

TEN GCC iNfrasTruCTurE PrOJECTs

AL-ZoUR REFINERy pRojECT oMAN NATIoNAL RAILwAy pRojECT

DUqM oIL REFINERy DEvELopMENT pRojECT - phASE 1

Owner: Oman Oil Company Budget: $6bn Progress: Expression of Interest (EoI) stage The project is being developed by Duqm Refinery and Petrochemical Industries Company (DRPIC), a 50:50 joint venture of Oman Oil Company and Abu Dhabi’s International Petroleum Investment Company (IPIC). In March, Foster Wheeler was awarded the Front-End Engineering Design (FEED) contract for project. The first phase will see the development of a 230,000bpd grassroots merchant export refinery within the Duqm Special Economic Zone (SEZ). Designed as a full conversion refinery, the plant will use delayed coking technology for bottom-of-the-barrel processing. The second phase is being planned as an associated petrochemical complex.

INFRASTRUCTURE MIDDLE EAST

Owner: Kuwait Petroleum Corporation (KPC) Budget: $15bn Progress: EPC stage

Al Zour refinery, with a capacity of 615,000bpd, will make oil products such as diesel, kerosene and naphtha for export, and low-sulphur fuel oil for domestic power stations. The client has extended the bid deadline for the EPC contracts. Submission of bids for Packages 1, 2 and 3 has been extended until the end of 2014, while the deadline for Packages 4 and 5 has been set at the first week of November 2014. For Packages 1, 2 and 3, the shortlisted international consortia are KBR, Japan’s JGC Corporation and Fluor Corporation from the US; and Spain’s Tecnicas Reunidas, Italy’s Saipem and the UK’s Petrofac. For 4 and 5, a joint venture of South Korea’s GS Engineering and Al Kazemi International has been invited to submit bids. The bid deadline has been extended to the end of December.

December 2014

Owner: Oman Railway Company (ORC) Budget: $15.5bn Progress: EPC stage Oman’s national railway network comprises 2,244km of track with 35km of tunnels, 40km of bridges, 50 terminals and eight marshalling yards. The network, which will connect the ports of Sohar, Duqm and Salalah, will comprise a double non-electrified track carrying both freight (120km/h max speed) and passenger (220km/h max speed) traffic. Three consortia – Korea Rail Network Authority (KRNA), Técnicas Reunidas and Parsons International – have been shortlisted for the Project Management Consultancy (PMC) contract, which has yet to be awarded. ORC’s Engineering, Procurement and Construction (EPC) tender for the 207km Phase 1 stretch between Sohar and Buraimi has attracted 18 bidders. The construction contract is expected to be awarded by mid-2015.

TEN GCC iNfrasTruCTurE PrOJECTs

CLEAN FUELS pRojECT

ShARq CRoSSINg

Owner: KNPC Budget: $14bn Progress: Mobilisation works

Owner: Public Works Authority (ASHGAL) Budget: $12 bn Progress: RFQ

The project involves the upgrade and capacity expansion of Mina Al-Ahmadi and Mina Abdullah refineries. The first EPC package covers process units at Mina Abdullah refinery. The second package covers revamping of the Mina Abdullah plant together with off-sites and utilities, while the final package is for revamping and installation of units and interfaces at Mina Al-Ahmadi refinery. Japan’s JGC Corporation and South Korea’s SK Engineering and GS Engineering have been awarded the Mina Ahmadi package, worth $4.8bn. The UK’s Petrofac, South Korea’s Samsung Engineering and CB&I Lummus from the US have been awarded the Mina Abdullah 1 package, worth $3.74bn. Fluor Corporation from the US and South Korea’s Hyundai Heavy Industries and Daewoo Engineering have been awarded the Mina Abdullah 1 package, worth $3.4bn.

SITRA REFINERy ExpANSIoN

TThe Sharq Crossing Programme comprises three iconic bridges – West Bay Bridge, Cultural City Bridge and Sharq Bridge – linked with an immersed tunnel which spans the area of Doha Bay. The 12km project, designed by famed architect Santiago Calatrava, will connect Doha’s Hamad International Airport with the city’s cultural district of Katara in the north and the downtown central business district of West Bay. Construction is slated to start in 2015 and wrap up by 2021. Last year, Fluor was awarded the PMC Contract for the project. Ashgal has already invited successful applicants for Stage 2 prequalification of the project. Along with dramatically altering Doha’s waterfront skyline, the Sharq Crossing – which will be capable of handling 6,000 vehicles an hour – is expected to take some of the pressure off existing roads.

Owner: BAPCO Budget: $6bn Progress: FEED study awarded and design stages finalised The Bahrain Petroleum Company (BAPCO) is planning to increase the capacity of the Kingdom’s Sitra refinery by approximately 270,000-360,000bpd. This will bring the country’s total crude refining capacity to 360,000bpd by 2018. In January 2013, BAPCO appointed the UK’s HSBC and France’s BNP Paribas as financial advisers. The refinery expansion project includes a crude unit and associated facilities, a hydrocracker and associated facilities, residue conversion units and a waste treatment facility. BAPCO has awarded the FEED contract to Tecnip. The EPC stage is expected to commence in 2016. The FEED for the Saudi-Bahrain oil pipeline, crucial to Sitra expansion, has been completed.

December 2014

INFRASTRUCTURE MIDDLE EAST

COVER STORY

EXCLUSIVE INTERVIEW

Structural Pathways HE Eng Essa Al Maidoor discusses civil engineering’s past, present and future By Anoop K Menon E Eng Essa Al Maidoor wears many hats. Apart from being the director-general of the Dubai Health Authority (DHA), he is also president of the Society of Engineers – UAE and chairman of the Infrastructure Committee and the Green Building Committee in Dubai Municipality. This list is not exhaustive; suffice to say he brings solid experience and qualification to the posts he helms. Al Maidoor earned his bachelor’s degree in Engineering from Utah State University, and prior to DHA, held the post of deputy director-general of Dubai Municipality. He is proud that the UAE is at the forefront of innovative construction technologies and practices in the region. He describes engineers as “drivers of the engines that drive the economy” and a “basic requirement for the development of any city or country”. Excerpts from the interview:

A global issue with local repercussions is the shortage of engineers, in terms of both quality and quantity. This issue cuts across sectors, from construction to infrastructure to energy and water. How do you think the Society of Engineers UAE can be part of the solution?

Developing and retaining human capital is always a challenge, but we also need to work towards ensuring that we continue to get skilled people. No matter how good the equipment or the building is, skilled staff is fundamental to delivering and maintaining projects and services. At the Society of Engineers, we organise events, like the Arabian Tunnelling Conference, to create and spread awareness and facilitate exchange of knowledge. This enhances human capital in the subspecialty of tunnel engineering. We have several other initiatives

INFRASTRUCTURE MIDDLE EAST

at SOE, including accrediting engineering certifications and regulating professional practices, standards and specifications. Through our Training & Development Centre, we offer courses in new technologies, subspecialties like green buildings and techniques like Total Quality Management. The UAE and the Gulf region use some of the most advanced construction technologies and practices in the world. We try to capture and convey the learnings in an academic format which helps in transfer of knowledge while also stimulating the creativity of the engineers. SOE has also developed linkages with international bodies like the Federation of Arab Engineers and World Federation of Engineering Organisation. We have a membership of around 32,000 engineers from different nationalities. They learn from the UAE, go back home and participate in the development of their countries. Numerous studies also point to the difficulties in attracting the young to the engineering field. Do you find young Emiratis attracted to the engineering profession?

We want to reach out to engineers at a professional level as well as at a student level. We have initiated programmes for young engineers and future engineers. We are in touch with all the 19 engineering universities in the UAE – the Deans Association comes under the umbrella of SOE. We also are looking at tailor-made programmes to

“Technology frees the minds of engineers and encourages them to be more creative while looking for solutions” HE ENg ESSA AL MAIDooR

December 2014

encourage our young to join engineering. SOE enjoys very good links with municipalities and ministries and looks at every project as a learning opportunity. We present these learnings as case studies for students as well as professionals. If we take Burj Khalifa as an example, how many will be built in coming years? If you lose that learning, it is gone. So we are always trying to bring these opportunities and engineers together. We also work with other engineering societies within the GCC to promote exchange ideas and experiences, through annual conferences and seminars on different topics like housing, sustainability and urban planning. You have underlined the importance of sustainable underground space as chairman of the Arabian Tunnelling Conference. How far ahead is the region in this regard?

A key factor which drives utilisation of underground space in cities is the land or property value in cities. In the case of Dubai, 20 years ago, 1sqm in the middle of Dubai would have cost AED 20; but today, it would cost AED 20,000. With land getting precious, any structure above the ground is obstruction. Underground gives you more flexibility. People don’t want disruption caused by construction above the ground to affect their lifestyle or environment or business. Having facilities like car parks below the ground is useful, effective and results in better utilisation of space without disturbing anyone. In metro stations and infrastructure related to the whole activity of metros, you can create markets and malls below the ground. Such spaces can also serve as refuges if there is a calamity. Moreover, technology has advanced to such a level that it is cheaper and safer to build structures underground that are also more durable and sustainable.

CoVER SToRY

December 2014

INFRASTRUCTURE MIDDLE EAST

CoVER SToRY

INFRASTRUCTURE MIDDLE EAST

December 2014

COVER STORY

What technologies or practices fascinate you?

Projects like the Dubai Metro and Strategic Tunnel Enhancement Programme (STEP) in the UAE have helped bring the best technologies and practices to the region. Type of soil, depth and size are some of the challenges encountered during tunnelling. Being in a coastal area, we have to drill through moveable sand, which puts stress on the tunnel. Drilling through rock is relatively easy. Accuracy is a major challenge with gravity tunnels where you need to have very accurate slopes. These challenges can be overcome using laser-guided tunnelling equipment. In the end, what matters is quality, which can be improved by using advanced sensors to guide the drilling or using special material in cutters. When we discuss experiences from different parts of the world, we are able to learn from each other, and this is applied in future projects. To what extent has technology made life easy for today’s civil engineer?

Imagine using open cut technology to tunnel across the Shaikh Zayed Road? That can never happen today, because it would be so disruptive. We encourage microtunnelling in Dubai because everything is done under the ground with minimal or zero disturbance. In commercial areas, the loss of a day’s business means a lot to traders. In the past, we used thrust boring for nondisruptive crossings. We used 500-tonne hydraulic jacks, which should give an idea of the force and the risk at work. Human beings at the front are subject to confined space and poor ventilation, no matter how much air you pump in. That’s why new technologies have made work easier and safer for workers and engineers. Technology frees the minds of engineers and encourages them to be more creative while looking for solutions, instead of being confined to what is possible or not. Increasingly, life cycle cost is a key discussion point when it comes to infrastructure. More specifically, is maintenance of infrastructure assets given the attention it deserves?

Citing my experience, I was able to improve efficiency by 90% in some systems through better maintenance. In fact, they were not being maintained at all. Today, maintenance has become easier thanks to technologies like CCTV, repair robots and pipelining

“You will find countries without natural resources, but flourishing because of good infrastructure”

As an engineer yourself, what challenges do you think face the new generation of engineers? Are the skill sets required entirely different from 10 years ago?

HE ENg ESSA AL MAIDooR techniques that eliminate digging. When we design any engineering structure or service, we must think about O&M. If I construct a dam and I put a critical valve in the middle of the dam, then how will I get access to it? To avoid such mistakes, engineers should think about O&M during the design stage. They should try to make it as easy and safe as possible. Ultimately, infrastructure represents a huge investment that is expected to render service through our lives and theirs. This approach is valid for any structure, whether it is buildings, bridges, pipelines or roads. When you start to design a city, building, road, tunnel with the right concepts, you can cut down on problems in the future. At the same time, when you make a master plan for a city, you shouldn’t set it in stone. You need to incorporate some elements of flexibility so that you don’t lose out on opportunities. You don’t want to restrict improvements because it is not as per the drawing. In the end, you are serving people, and the drawing is only a tool that helps you in that endeavour. The impact of climate change and extreme weather events on built environment is a trending topic on the international conference circuit. Has it become a part of the construction industry’s discourse in the region as well?

Historical data is important when you are talking about factoring natural events like cyclones, floods and earthquakes into design. As we accumulate more data, our developments will be based on known parameters. Based on that knowledge, one can establish the design manuals for engineers. Building codes in the UAE have followed this path. For example, we get the rainfall data from meteorological stations – in fact, Dubai alone has more than eight stations to monitor earthquakes. We also get data from the surrounding region through formal arrangements.

When I was studying in the university, there were no smartphones or tablets; even the laptops looked different. Today’s generation take touch screens for granted, which tells us that the tools have changed. But what shouldn’t change between generations is education and seriousness. Of course, the education system too has evolved, but society has an important role to play in producing the best engineers. I think we need engineers who are a little bit more serious and really hardworking, because knowledge doesn’t develop on its own. We have to dig for it, work hard for it, and that’s the only way it can change our lives. Fundamental attributes like discipline, commitment and knowledge are as important for today’s generation of engineers as they were for ours. I believe that engineers are drivers of the engines that drive the economy. Infrastructure is the main frame for growth and development. If you have good infrastructure, you will have a healthy city, because you have good sanitation, electricity, water and roads. In that sense, engineers are a basic requirement for the development of any city or country. You will find countries without natural resources, but flourishing because of good infrastructure. I am proud that Dubai is one of them, as are all the cities in the UAE, because the government has given attention to infrastructure right from the beginning. Good infrastructure creates a positive feedback loop for the development of the economy and society. As the president of SOE-UAE, how do you see the role of female engineers evolving in the country?

The fact that women constitute half of society means they will always be a significant part of the country’s workforce. I am proud that the UAE provides a very encouraging environment for women. In fact, they are part of our human capital. I don’t think there is any discrimination between men and women. What matters is not gender, but skill and talent. In fact, two of our board committee members are women. In the UAE, you will find women engineers in municipalities, ministries, private sector, and that will only continue to grow. December 2014

INFRASTRUCTURE MIDDLE EAST

TRANSPORT

“If you combine urban segment and emerging economies, you could reach growth rates of 6-8% per annum” HENRI POUPART-LAFARGE, PRESIDENT, ALSTOM TRANSPORT

INFRASTRUCTURE MIDDLE EAST

December 2014

TRANSPORT

RAIL BUSINESS

Solid fundamentals

Alstom Transport has invested in customer proximity, integrated product offerings and technology leadership to grow its rail business worldwide By Anoop K Menon ccording to Henri Poupart-Lafarge, president, Alstom Transport, the fundamentals driving the global railway market – urbanisation, sustainable development, economic growth and public funding – have remained unchanged for the past two years, and are not expected to change in the future. “The increase in the number of cities and their population is creating the need for urban transport as well as intercity transport between large cities,” said PoupartLafarge while speaking to the press during Innotrans 2014 in Germany recently. “Focus on sustainable development is leading to commitments favouring rail, which is seen as one of the most environmentfriendly modes of urban transport.” Transportation systems have always been crucial drivers of economic growth and vice versa. This is especially applicable to emerging countries where economic and demographic growth is creating a growing demand for infrastructure, trains and signalling. Mature markets, on the other hand, are mainly supported by projects aimed at updating and modernising existing infrastructure, as well as by growing environmental concerns. Last but no less important is government support. Poupart-Lafarge explained: “No public transport or rail transportation system in the world works today without some form of subsidy or public funding.” But he also pointed out that a slow global economic recovery could be a limiting factor, at least in the short term as governments turn their attention to controlling deficits. Economic growth has slowed not only

in Europe, but also in some emerging economies like Brazil and South Africa. “Though governments are still pushing for investments in public transportation, lack of public finance is an impediment to the development of projects,” said Poupart-Lafarge. “While the situation hasn’t fundamentally changed from a long-term perspective, we see more challenges in the short term.” UNIFE’s mid-term forecast sees steady annual growth averaging around 2.6-2.7% over the next six years. While main line markets remain the largest, demand in coming years will be focused on the urban sector, and more so in emerging countries where urbanisation is a major trend. These new markets are also showing a strong demand for turnkey systems, defined as a combination of infrastructure,

Dubai Tram The Citadis tram is the first in the world capable of operating in temperatures of up to 50 °C

power supply, track systems, rolling stock, signalling and the system to make them work together. The proportion of urban systems tendered and delivered as turnkey is as high as 80% in the Middle East and Africa and 50% in Latin America. “In rolling stock, the fastest growing segment is urban systems, thanks to the urbanisation trend,” said PoupartLafarge. “If you combine urban segment and emerging economies, you could reach growth rates of 6-8% per annum.” Apart from urban systems, the other growth segments are services and signalling. In the case of services, the major drivers outlined by UNIFE are the growth in installed base and outsourcing of services by rail operators. The drivers of signalling are investments in new urban lines and the modernisation of existing lines. According to Poupart-Lafarge, what sets Alstom apart in the rail industry is its strong presence in all segments, right from rolling stock (trams, high-speed trains) to systems (infrastructure and turnkey) to services (spare parts, modernisation and long-term maintenance), to signalling. “Over the years, the share of rolling stock has been balanced out by growth in other activities, to the extent that rolling stock represents only half of our activity. This is part of our long-term strategy, which we will continue to follow.” Currently, rolling stock accounts for 49% of sales, with the rest equally split between signalling, services and systems. Geographically, Alstom Transport’s markets are split into seven regions: France, Europe, North America, Latin America, Asia/ Pacific, the Commonwealth of Independent States and the Middle East/Africa. According to a UNIFE 2014 report, Europe

December 2014

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TRANSPORT

PASSENGER RAIL AGENCY OF SOUTH AFRICA (PRASA) CONTRACT IN SOUTH AFRICA As a part of its customer proximity strategy, Alstom Transport establishes local factories and forges partnerships with other companies in its target markets. Under the contract, Alstom will supply PRASA with 600 X’Trapolis Mega, the latest addition to the X’Trapolis platform, over a period of 10 years. The project will enable South Africans in Johannesburg, Cape Town, Durban and Pretoria to travel on modern trains with shorter journey times. The trains are designed to carry passengers to and from the urban periphery. The flexible design of X’Trapolis trains means their capacity can be adapted to suit passenger flows. Alstom has established a new incountry joint venture, Gibela, which is 61% owned by Alstom, 9% by New Africa Rail (the local partner chosen by Gibela) and 30% by Ubumbano Rail, selected by PRASA and representing the BBBEE (Broad Based Black Economic Empowerment) partners – the Gibela & PRASA employees’ trust and the education trust. The local factory will benefit from a transfer of technology from the Lapa factory in Brazil, where the first 20 trains will be built and where engineers will be trained in design, manufacture and commissioning (12 engineers are currently being trained in France). The factory will be based in Dunnotar, 10km north of Nigel in the Ekurhuleni Metropolitan municipality. With this contract, Alstom will create 1,500 jobs directly in the country in the first year, and the company is committed to producing more than 65% of trains locally from the second year. The long-term benefits in terms of skills transfer, education and industrialisation will be considerable for the South African economy and the railway industry.

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(excluding France), which represents about a third of the global rail market, is expected to grow – thanks to major projects underway or in the pipeline like Grand Paris, London Underground and HS2 – but at a slower rate. The market is forecast to grow from €32bn to nearly €35bn per year from 2011-2013 to 2017-2019, an annual growth rate of 1.6%. But the regional markets with the highest growth rates over the next six years will be Latin America, Asia/Pacific and NAFTA. Latin America is the market with the strongest growth, due to the large number of urban projects, while North America is witnessing growth on the back of freight and urban systems, in this case light railways. The Africa/Middle East region is expected to maintain its current high market level in coming years, with the market forecast to grow from €8bn to €9bn per year from 2011-2013 to 2017-2019, an annual growth rate of 2.2%. COmPETITIvE STRATEGY

In his address, Poupart-Lafarge also provided a glimpse into the strategy which has enabled Alstom Transport to develop close proximity to its customers. The strategy is based on the four pillars of customer-focused geographical footprint, integrated solutions, technology and innovation, and operational excellence. Alstom has been able to develop both a local and global presence, which has helped differentiate the company from competition. “Our customers require localised and tailormade solutions, so we have to be located close to them,” said Poupart-Lafarge. “We are physically present in all large markets across all continents, either directly or through partnerships.” These partnerships, whether joint ventures or strategic and commercial partnerships, enable Alstom to meet customers’ growing demand for local presence while developing products and solutions that are better adapted to local specificities. Alstom Transport’s key partnerships include TMH in Russia, CITAL in Algeria and GIBELA in South Africa. “We are not averse to partnerships, because we understand the way to market differs from one region to another,” said Poupart-Lafarge. “In fact, partnerships is one of our key competencies.” The company has also invested in building up its services business to strengthen its relationship with its customers. The Alstom chief elaborated: “Service activity is of utmost importance, because it helps us build local

December 2014

presence and develop customer intimacy. We don’t believe in building turnkey projects and walking away. Rather, we believe in working with our customers day-to-day, hand-in-hand. We have maintenance activities in more than 28 countries.” The second strategy is to provide a complete range of integrated solutions that address all levels of integration that customers may seek. These range from a single sub-system, to solutions integrated within a single market segment (like the Coradia Continental trains specifically developed for Europe), to bundled offers between two market segments, to full turnkey systems (like Riyadh Metro). Poupart-Lafarge added: “We have developed turnkey systems in-house; in other words, we are not just implementing turnkey solutions on a case-by-case basis, we are sold internally on how to best design the turnkey solution.” For example, Alstom Transport developed Axonis, a turnkey elevated metro system that meets the demands of cities looking for system solutions that can be installed quickly and easily while providing an optimum life-cycle cost. Axonis’ energy consumption is 30-40% lower than similar systems. “This is also extremely important to value the quality of our products,” said PoupartLafarge. “We aim at producing products that have the best efficiency in terms of TCO during their lifetime, in terms of energy efficiency and maintenance cost.”

“We are not averse to partnerships, because we understand the way to market differs from one region to another. In fact, partnerships is one of our key competencies” HENRI POUPART-LAFARGE, PRESIDENT, ALSTOM TRANSPORT The third pillar is differentiation through innovation and technology. “We are driven by innovation, but one thing which has changed is that we are not looking for absolute speed. Rather, we are looking to improve the efficiency of our systems, particularly environmental performance or capacity.

TRANSPORT

“For example, our new Urbalis Fluence signalling solution, implemented in Lille Metro, helps reduce headways down to as little as a minute through the use of direct train-to-train communication, which helps increase metro capacity. “We are also focused on reducing the TCO, for example through recyclability. Thus, our latest rolling stocks are minimum 95% recyclable, which helps tackle the end of life of the products.” On the environmental performance front, Alstom Transport and Deutsche Bahn have jointly launched hybrid shunting locomotives that consume up to 50% less fuel than conventional ones and reduce pollutant emissions by up to 70%. Alstom has also signed Letters of Intent to develop a new generation of diesel trains based on fuel cells with near zero emissions. Additionally, Alstom Transport is also developing new technologies to address new markets. Commenting on the fourth pillar of operational excellence, Poupart-Lafarge said that his company has implemented d2e, an internal programme dedicated to excellence, and a number of sub-programmes aimed at improving operations. He continued: “We are here to satisfy our customer, which means we need to deliver on time, at the right cost and quality, and be competitive. If you want to be the most global company in transport but also deliver the same quality from all the facilities across the world, whether it is Brazil, India or China, the customer has to have the guarantee that the quality will be the same. For that, we have extremely strong global processes. The idea is not to have a different footprint with a different type of quality and technology, but to have a single Alstom Quality worldwide.” Worldwide demand for mobility is growing steadily with demographic change, urbanisation and economic development. As one of the only global integrated players in railway systems and solutions, Alstom Transport’s market position is expected to be further enhanced by the acquisition of GE’s signalling business (as part of GE’s acquisition of Alstom’s power business). This is expected to strengthen Alstom Transport’s balance sheet and catapult the company to global number two in the signalling business, while giving it a stronger portfolio to tap the worldwide growth of the rail transport market.

GROWTH FORECASTS FOR THE RAIL mARkET bY REGION (IN €bN)

mARkET FORECAST (PRODUCTS)

mARkET FORECAST (ROLLING STOCk)

STEADY GROWTH According to UNIFE’S 2014 report, the rail market will continue to grow at about 3% per year throughout the world. Historical markets still represent the largest proportion of the accessible market, defined as that share of the total market that is open to external suppliers. While Europe (excluding France) is the biggest market, the main growth is taking place in emerging regions such as the Middle East, South America and Asia-Pacific. The Middle East has been particularly dynamic over recent years, with ambitious projects such as the Riyadh metro. Despite an already high

market volume, the region will continue to invest in rail systems in the coming years. According to UNIFE, demand in coming years will be focused on the urban sector (+4.1% per year), despite main line markets remaining the largest. Growth in the urban sector is closely tied to urbanisation in emerging economies. The proportion of the urban market addressed by turnkey systems is forecast to grow significantly in coming years. The services market is also growing strongly (+3.7% per year), due to maintenance being offered in addition to orders for rolling stock and turnkey systems, an increase in the global installed base, and the outsourcing of services by rail operators.

December 2014

INFRASTRUCTURE MIDDLE EAST

CONSTRUCTION

PROJECT MANAGEMENT

“Wise project management enabled Dubai Metro completion despite market downturn” Mark Langley, president and chief executive officer of Project Management Institute (PMI), talks to Neha Bhatia about the best project management practices for public and private sector organisations What was your biggest takeaway from the recently concluded Dubai International Project Management Forum (DIPMF) 2014?

The conference has been fantastic from a content standpoint, and one of the most significant things I heard was all the examples of how executive sponsorship has improved project management practices in organisations. Authorities like Mattar Al Tayer from the Dubai Roads & Transport Authority (RTA) and Saeed Al Tayer from Dubai Electricity and Water Authority (DEWA) are excellent examples of how the support of executive leaders within organisations can turn things around for overall project success. The same goes for Emaar Properties, which has, as chairman Mohammed Alabbar’s speech explained, recognised its core strengths and built an organisational structure around them. What motivated your partnership with the RTA to co-host DIPMF?

I think the RTA understood very early on that intelligent project management practices would benefit its operations, and that’s possibly one of the factors which drove chairman Al Tayer to set up the Project Management Office, headed by Ms Laila Faridoon, within the organisation. I don’t know what led him to the decision, but I can most certainly see its results. By recognising the RTA’s in-house capacities and establishing

the PMO, he’s implemented what we at PMI have identified as best practices in organisations. He’s essentially building career paths in project management by identifying the skills of individuals who can lead the allotted departments and bringing in greater standardisation. Can the local private sector replicate the successful project management practices followed by the RTA?

The failure of an organisation can often be due to the absence of executive sponsorship for greater project management standards. Various governmental agencies in Dubai, such as Al Maktoum Airport Authorities and DEWA, have recognised that working with the private sector benefits both their capacities on mega projects as well as their capabilities for better project management. The core elements of project management are the same, but a private firm has different factors to consider while adopting any new plans and ideas. What are these factors, and how do they differ from those a government body faces?

For starters, a private sector entity may be governed by market performance if it is publicly traded. The private sector might brand their targets “strategy” or “management agenda”, whereas the government will call it a “vision”.

“The Dubai government, even during the market downturn of 2008, did not stop fuelling investment into the Metro, because it recognised that the project would eventually benefit the residents of the city” 38

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December 2014

There is immense pressure on private sector companies to consistently deliver results without letting the impacts of a strategic change in project management practices and methods affect their performance. In such a situation, any organisation, be it private sector or public, should focus its efforts on funding and driving those operations which take it closer to its vision or strategy, and eliminate any ideas which might not directly drive growth. How do governments prioritise their operations in such a scenario?

The Dubai Metro is a great example of wisely picking your operational priorities. The Dubai government, even during the market downturn of 2008, did not stop fuelling investment into the Metro, because it recognised that the project would eventually benefit the residents of the city. The Metro was always a part of the strategic vision set in place by His Highness Sheikh Mohammed bin Rashid Al Maktoum, and the decision to complete the Metro, launched shortly after the downturn, shows their mature capacities in the field of project management. What’s in store for project managers of the future?

Small private companies have to build their capacities, and will certainly learn to prioritise the best practices for their organisation as events like DIPMF catch up. More effort is also being invested to enhance educational channels for students to ensure they are provided precise project management studies. The PMI is working with universities and private sector firms in this regard, as it’s an area of opportunity for both to spread their expertise.

CONSTRUCTION

â&#x20AC;&#x153;There is immense pressure on private sector companies to consistently deliver results without letting the impacts of a strategic change in project management practices and methods affect their performanceâ&#x20AC;?

December 2014

INFRASTRUCTURE MIDDLE EAST

OIL & GAS

INTEgRATED STRATEgy

Serious play Rockwell Automation showcased its ability to deliver end-to-end projects for the oil and gas sector at ADIPEC 2014 n the Rockwell Automation stand at the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) last month, the company’s vMonitor offering occupied the pride of place with its other signature product for the oil & gas sector, the PlantPAx. vMonitor, one of the global technology leaders for wireless solutions in the oil and gas industry, was acquired by Rockwell Automation a little more than a year ago. The company’s technologies include an all-wireless portfolio of wellhead sensors and transmitters, RTUs, gateways and modems as well as turn-key monitoring and control systems and services. These offerings cover a broad range of applications from oil and gas wells, pipelines, pumping and lift stations, to refineries and tank farms. The acquisition was intended to strengthen Rockwell Automation’s ability to deliver endto-end projects to the oil and gas sector. At the time of the acquisition, vMonitor had the world’s largest installed base of wireless wellhead monitoring systems for natural and artificially

INFRASTRUCTURE MIDDLE EAST

lifted wells with more than 6,000 well sites for major oil and gas companies around the world. While Rockwell Automation had successfully targeted the oil and gas upstream and midstream segments through its PlantPAx process automation system, the company never had a system at the well head. The vMonitor acquisition helped close that gap, and the technology is now a key component of the PlantPAx system. Pankaj Shrivastava, Field Business Leader, Rockwell Automation said: “Once you automate the well heads and start collecting the data, you need tools to optimise that data, to understand

“Once you automate the well heads and start collecting the data, you need tools to optimise that data, to understand whether the well is performing properly” PANkAj ShRIvASTAvA, FIELD BUSINESS LEADER, RoCkwELL AUToMATIoN

December 2014

whether the well is performing properly, what decisions need to be taken. On the plant or the downstream side, it is the same thing. You have to get data from the OEM skids for water treatment or oil treatment. All that data can be transmitted and collected to enable you to take action, thanks to Integrated Architecture.” vMonitor has been creating the digital oilfield with its extensive application knowhow inclusive of wireless telemetry, hardware, software, sensors and the ability to seamlessly integrate solutions. “We have applications that have been developed for artificial lifts to optimise production,” said Khojema Netarwala, Engineering & Application Manager at Rockwell Automation. “They are suited for all kinds of wells including natural flowing, gas lift and Electric Submersible Pump (ESP) wells.” In most oil wells, the well head information is taken manually, going into the system later in the day. That’s when the reservoir engineer gets to read the information and assess whether or not the well is operating correctly followed by corrective action, with the entire process taking two-three days. A digital oil field, on the other hand, is a real time system. It reads the real time data,

OIL & GAS

takes decision on behalf of the operator and gives alarm to the operator on the action taken so that the operator can validate it. “You can see the actual performance of the well, and if it is not optimised to the right conditions, then the system automatically gets it back to the correct range,” said Netarwala. “For each application, there is a certain criteria to get maximum production while maintaining the health of the pump. For example, for an ESP, there is an efficiency curve. So on the well head itself, the decision is made on whether the well is working is in the optimal range or is going out of it.” He pointed out that the benefits of digital oil fields go beyond increases in production. “In places where they have implemented the digital oil fields concept, production has increased from 8-10%,” says Netarwala. “But there are associated benefits as well in terms of security and better co-ordination.” In conventional oil wells, if anything happens at the well head, unless there is a physical presence, operators don’t come to know about the threat. But the well head readings, transmitted wirelessly to the control room, can tell the operator whether the well is working or if there are issues. Also, digital oil fields also enable better coordination between production and maintenance departments. Netarwala explained: “You can optimise your production by sending personnel only to those wells that need to be attended to rather than sending them out every day to the field, which helps optimise opex.” vMonitor coupled with PlantPAx allows Rockwell Automation to offer a seamless integrated solution that meets the unique needs of the oil and gas industry. PlantPAx meets the needs of the oil and gas industry for higher flexibility through modular design and higher levels of integration. Rockwell has positioned PlantPAx as a modern DCS, which allows users to optimise their production, while helping to reducing risk and lower total cost of ownership. PlantPAx provides a scalable and modern DCS that allows the smaller systems used for small skids to be easily integrated. Shrivastava explains: “End of the day, most of your I/Os are controlled not by the main DCS but by the skid packages. Where they come equipped with our system, it becomes easier for the end user to integrate those skids into the overall system.” At the core of PlantPAx is Integrated Architecture, which makes

Khojema Netarwala

NEW ACQUISITION A few days prior to ADIPEC 2014, Rockwell Automation announced the purchase of ESC Services, a global hazardous energy control provider of lockout-tagout services and solutions. “ESC Services will enable Rockwell Automation customers to increase asset utilisation and strengthen enterprise risk management, while adding safety to our growing portfolio of data-driven, cloud-enabled services,” said Matt Fordenwalt, Rockwell Automation consulting business manager. ESC’s unique methodology utilises Quick Response (QR) codes that can be scanned to obtain asset information and streamline compliance with both external regulations and internal safety policies. “The global use of lockout-tagout is expanding among multi-national corporations, and represents a great growth opportunity,” said Kelly Michalscheck, president, ESC Services. “This acquisition enables us to extend ESC Services lockout-tagout procedures and ScanESC solutions to tens of thousands of additional OEM machines, delivering more value and unique offerings to Rockwell Automation’s extensive global channels.” ESC Services will be integrated into Rockwell Automation’s Control Products & Solutions segment as part of its customer support and maintenance business unit.

Pankaj Shrivastava

integration a trouble-free affair. Elaborating on the benefits of Integrated Architecture, Shrivastava said: “Irrespective of where you buy the system, there should be certain common elements across that platform which eases integration from an end user point of view. This is important from the end user’s standpoint because of the data lying in the plant. Earlier, it was difficult to access that data even if you wanted it. With Integrated Architecture, that data can be made available to the end user.” Rockwell Automation supplies the tools needed to convert that data into information for the operator, supervisor and manager. As process control systems provide more and more options, information is key to translating this to meaningful information for the operators. PlantPAx can provide advance diagnostics and PID information to the operators in order to reduce MTTR (Mean Time To Repair) and improve production outputs. Safety is an integral element of PlantPAx thanks to the trend of integrated control and safety. The electrical components – drives, soft starters, MCCs – are integrated into the PlantPAx as also Advanced Process Control (APC),through Pavilion Software. Designed as an open platform, PlantPAx is available from either systems integrators or the Rockwell Automation solutions group, giving users a choice of partner. All PlantPAx components are standard, offthe-shelf products, with Logix hardware and software solution at the core. Shrivastava said: “We can do the implementation for you or our system integrators or OEMs can do it for you. The end-user gets a wide choice as they are not tied down to a certain company.” December 2014

INFRASTRUCTURE MIDDLE EAST

OIL & GAS

DIGITAL OIL FIELDS

The productivity proposition In an interview with Infrastructure ME, Dan O’Brien, global director of production management, Honeywell Process Solutions, deconstructs the digital oil field trend

Among E&P companies, there is better use of the increasing amount of available data, which is converted into timely info. This helps employees to be more proactive and efficient in managing and monitoring production operations. Automating tasks in the upstream industry is also becoming important if we consider that new reserves are more difficult to find. They either come with greater challenges when going deeper and more remote, or when covering a wide geographical area with hundreds or thousands of wells, which demands more agility and proactivity. The latter also implies the need to efficiently exploit producing assets. Taking into account the important reserves and projects in the Middle East, digital oil field solutions can be a key factor to enable more efficient, safer operations. This would meet production targets, minimise costs and better exploit assets for longer, and the latter makes the Middle East a high growth area for this technology. In addition, the ongoing shortage of skilled people in the oil and gas industry means that technological advancements can help to support where the human workforce is spread thin. This also has a positive impact on health and safety. Automated systems can provide a greater level of protection for employees, flagging potential risks or failures, and helping to shift from a reactive to a more proactive operation approach. In which upstream production areas does automation have the greatest impact?

The area with the greatest impact will depend on several factors including

desired functionality to take advantage of the available data to operate and produce more efficiently in various areas, with applications ranging from operational data, process safety, production surveillance, equipment effectiveness and production excellence to operational performance.

hat are the factors driving the digital oil fields trend? Why is automating upstream becoming increasingly important?

INFRASTRUCTURE MIDDLE EAST

What are the different technologies – hardware and software – that make digitising of upstream production possible?

Dan O’Brien

specific circumstances and challenges of the asset or company in consideration, the availability of real-time data and other data, and the location of assets and resources. For this reason, Honeywell believes that a digital oil field solution should be scalable to adapt to the particularities of each case – since one solution cannot fit all – allowing functionality expansion as the challenges and company evolve. The base functionality promotes safe operations to protect people and the environment. A basic solution should provide visibility of what is happening at the fields, a fundamental requirement for managing production operations, and then select the

“A digital oil field solution should be scalable to adapt to the particularities of each case” DAN O’BRIEN, GLOBAL DIRECTOR OF pRODUCTION MANAGEMENT, HONEywELL pROCESS SOLUTIONS

December 2014

Foundational enablers like field instrumentation and measurements, data acquisition systems, and telemetry and data historians help digitise upstream production. The data available will modulate the solution that can be implemented; various IT technologies allow a vast amount of data generated at the field to reach a central accessible location, technologies that include telecommunication and networking systems. Making use of open communication standards enables the sharing of data, and data integration between various applications in the enterprise ecosystem, which will feed from shared data. It is vital that any application on the ecosystem shares data to other applications via standard means (for example, OPC, ODBC, service interfaces). An additional technology enabler has been the exponential increase of computing power at a lower cost to bring further intelligence and more applications to the field and operations, to support continued safe operations. Also, the ability to virtualise servers has enabled a powerful degree of freedom to keep up with systems and hardware updates, back up systems, and restore and test to minimise downtime. Implementation of all of the above also comes with the need to put cybersecurity measures in place, as there is increased connectivity between office and production locations.

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Oil & GAS

WATER FOCUS

Banking on experience Asad Iqbal Khan, manager – Business Development, AES Arabia speaks to Infrastructure ME about his company’s long innings in the region’s energy sector, and plans to venture outside the Middle East Arabia. We are always in compliance with specifications, terms and conditions and different procedures of our customers. Moreover, we have a good track record of successfully completing projects before scheduled times. Our commitment to excellence in terms of technical capabilities, design competency, engineering and execution have helped us win our customers’ trust. Previous work experience with Middle East customers can also lead to new business opportunities, something that our competitors might not have.

Could you tell us about your history in the Middle East, and milestone projects?

Since its inception in 1994, AES Arabia has been very active in the region especially with the stake holders in oil & gas, power and industrial sectors. I am proud to say that we are now regarded as one of the top water and waste treatment management and turnkey solution providers in the Middle East. We have been working with prestigious clients like Saudi Aramco, SABIC, ADNOC, PDO and SEC, where among many other projects, AES completed six large desalination plants in 1987 and since then, we have been providing aftersales service for several years. Another major customer in Saudi Arabia is SWCC, for which AES built both Haql and Duba seawater RO desalination plants in 1989 to bring them up to the latest technology and original design capacities. In 1997, AES was picked among several major water treatment firms to carry out the 13,000m3/ day BWRO water treatment plant at King Khalid International Airport and MODA. We completed the job to the full satisfaction of the client. In late 2000, AES was awarded the construction and upgrade of the 38,000 m³/ day BWRO plant water treatment facility in the Royal Commission of Jubail, Saudi Arabia, a very demanding client, once again on merit basis. We have also implemented some challenging projects with well-known multinational companies like Eni, Exxon, Total and Shell in Iraq, Yemen, Algeria, Sudan, Oman and Abu Dhabi. Thanks to our long experience and elevated learning graph, AES Arabia has been awarded and recommended for several awards in the water and waste water industry by world renowned companies such as JGC Yokohama, Technip, TOTAL, GWI, and CWC. Are you present in all the markets that you deem as important?

INFRASTRUCTURE MIDDLE EAST

What are the challenges driving demand for innovation and new technology in the water industry? Asad Iqbal Khan, Business Development, AES Arabia

I need to emphasise that we are doing exceptionally well in the energy sector. Keeping these niche markets as our prime focus and source of our major revenue, we are also focusing on projects in infrastructure, industrial and hospitality markets as well. We are getting plenty of opportunities to work on Saudi Aramco projects thanks to our previous work experience and capabilities in executing medium to large size projects for that client. Our other major clients in the Middle East include SABIC, ADNOC, Sonatrach and PDOC, who at various times awarded us projects to supply complete solutions, such as water treatment reverse osmosis plants, wastewater treatment plants and chemical injection skids. What differentiates your company from other companies in the market?

Unlike other companies that are based in Europe or America, AES Arabia has the benefit of being based in the Middle East with a production facility in Riyadh, Saudi

December 2014

My stance on this topic has been consistent with the fact that the Middle East suffers from water scarcity, whether it is for domestic consumption or industrial consumption. As the region is arid, natural sources of water supply are limited, making it dependent on desalinated water to meet its fresh or potable water needs. But this can lead to pollution from brine discharge, which again, is subject to certain regulations. Scarcity of water and risk of marine pollution has forced technology providers to come up with solutions where wastewater or effluent from industries, refineries or humans can be recycled for use in the different phases of industrial processes or irrigation. What is your take on 2014 and 2015? Are the fundamentals still valid?

We don’t see a downward graph as oil companies in the Middle East haven’t stopped tendering new projects. In my opinion, the crisis of low oil prices will be over soon; however, it gives leverage to the operator to produce more and more in order to maintain the deficit. I must also admit that a substantial percentage of our business comes from regional oil & gas and energy sectors.

Oil & GAS

EVENT REPORT

Bigger and better ADIPEC 2014 concludes with $8.5bn worth of generated business he 2014 edition of the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) ended on 13th November with an estimated $8.5bn worth of business generated during the four days of the event. The organisers claimed a 70% growth in generated business compared to last year’s value of $5bn. Held under the patronage of HH Sheikh Khalifa Bin Zayed Al Nahyan, President of the United Arab Emirates, ADIPEC 2014 was hosted by the Abu Dhabi National Oil Company (ADNOC), organised by dmg events, and supported by the UAE Ministry of Energy and the Abu Dhabi Chamber. Christopher Hudson, Senior Vice President, Energy at dmg events, said: “The success of ADIPEC 2014 and the participation of all key stakeholders have cemented the event as a global knowledge-sharing hub in the region. As the third largest energy event globally, and the largest in the Middle East and North Africa, ADIPEC will continue to grow, and meeting the world’s energy demands through best practice will always be its primary objective.” ADIPEC 2014 has also broken its previous records in international attendance and participation. According to the preliminary figures, more than 70,000 visitors attended the 30th anniversary edition of ADIPEC this year, an increase of more than onethird compared to 2013. ADIPEC 2014 also welcomed 1,868 exhibitors, 6,323

delegates, and in excess of 600 speakers. HE Abdulla Nasser Al Suwaidi, Director General of ADNOC, said: “It is through such initiatives that we are able to bring the best and brightest minds to share the most sophisticated technologies, latest research, and expertise. This dissemination of knowledge plays a pivotal role in the development and progress of the energy sector.” Leading speakers at the conference included Amin Nasser, Senior Vice President, Upstream, Saudi Aramco; Arnaud Breuillac, President, Exploration & Production, Total; Andy Brown, Upstream International Director, Royal Dutch Shell; Lorenzo Simonelli, President & CEO of GE Oil & Gas and Robert Dudley, Group Chief Executive, BP. The technical programme featured sessions on critical topics in the energy sector, including Exploration and Production Geoscience; Unconventional Resources; Field Development; Drilling and Completion Technology; Projects Engineering and Management; Operational Excellence; Health, Safety, and Environment; and People and Talents. Ali Khalifa Al Shamsi, ADIPEC 2014 Chairman, and Strategy & Coordination Director at ADNOC, said: “We would like to thank every individual and entity that has played an important role in the success of ADIPEC 2014, from the organisers and supporters, to the participants and all those who attended.” This year’s edition of ADIPEC hosted 16 National Oil Companies and 17 International Oil Companies, with 20 international

pavilions including major market players US, China, and Canada, and emerging markets Indonesia and India, marking the largest global participation in ADIPEC’s history. The ADIPEC Awards Ceremony, hosted by ADNOC, took place at the Emirates Palace Hotel on day one. The Awards, which celebrate excellence in energy and recognise innovation in the Middle East, welcomed a record 396 submissions this year. The Best Oil and Gas Project award went to Drydocks World Dubai for the ‘Construction of World’s Deepest & Largest Subsea Oil Storage Facility.’ Schlumberger won the ‘Best Oil & Gas Innovation or Technology’ category for its submission ‘GeoSphere: Truly Game-changing.’ Tim Day, Drilling PetroTechnical Engineering Centre Manager at Schlumberger, said: “GeoSphere is a tool used to optimise well landing in order to enhance hydrocarbon production. Oil has less places to hide with Geosphere. As nearly all of the ‘easy’ oil has been found, we now have to look for more challenging sources, and this technology allows us to drill in those locations.” Winner of the ‘Young ADIPEC’ Award, Mohammed Bader Abdullah from the Kuwait Oil Company (KOC) was recognised for his submission ‘Living a Dream’. “Future leaders are those who have the eagerness to learn more, the innovative skills to work more, and the curiosity to take risk,” said Bader, who was the first Kuwaiti to join the French Institute of Petroleum, and the first Kuwaiti Engineer to work on the EOR project with KOC in the country’s north oil fields.

December 2014

INFRASTRUCTURE MIDDLE EAST

EXECUTIVE INSIGHT

Thibaut Trancart

“Maintenance of a driverless metro is based on stringent service levels designed to ensure maximum availability”

Cutting variables Thibaut Trancart, country director, Thales UAE, explains how Dubai Metro helped pioneer the most advanced railway technologies in the region he true impact of a public transport system like a metro on a country’s economy is always open to debate. In the US, for example, it has been found that a 10% increase in transit numbers only accounts for a 0.5% increase in rental yield. However, Dubai is a very different landscape since it is an urban agglomeration with clusters of likeminded businesses served by the metro. The Road & Transport Authority (RTA) has reported a rental increase of anything from 7-34% for properties near a metro station. Such numbers can only be achieved if there is a consensus that the public transport system is efficient and reliable; otherwise, rents near public transport systems decline due to congestion, poor parking and overspill into other transport networks. Now five years old, the Dubai Metro is used by 500,000 passengers on a daily basis and boasts a punctuality rate above 99%, among the best in the world. While Dubai had the vision to plan the Metro running down the spine of the city – without disrupting other transport

INFRASTRUCTURE MIDDLE EAST

networks, but close enough to support them – technology played a crucial role in ensuring that the Metro is efficient and cost-effective. Maintenance of a driverless metro, in general, is based on stringent service levels that are designed to ensure maximum network availability. The process is supported by a programme of both preventive and corrective measures, with regular inspections and coverage checks to verify the system integrity. Ever since we delivered our systems on the Red and Green lines of Dubai Metro, Thales has continuously supported RTA in ensuring that the metro remains operational around the clock. This is possible thanks to our local team of experts who are fully dedicated to intervening remotely and onsite in a timely and efficient manner. In line with the RTA’s vision of a fully automated, self-operating system, Thales was chosen to supply its SelTrac Communications Based Train Control (CBTC) solution. We delivered a complete solution allowing communications capabilities between trains, stations and the Operations Control Centre (OCC). The solution includes the means to control, in real time, the speed and positions

December 2014

of the trains so that people can safely catch a train every 60 seconds during peak periods. With proven efficiencies, SelTrac CBTC allows other critical infrastructure, such as airports, to market the distance of their location from the traveller’s point of origin with confidence. Dubai World Central (DWC), for example, expects 220m passengers to travel through the airport once it is completely operational. Transferring passengers between the city centre and the airport becomes critical to the airport’s reputation as a seamless hub and its operation, since delayed trains can cause a domino effect that disrupts air traffic control and terminal crowd management. With the RTA preparing to extend one of its lines out to DWC, the right technology can help it guarantee travel times to ensure the airport is able to focus on its core competencies. The same principle applies to public transport. To make prudent decisions, policy makers must be equipped with the best information and analysis about the efficiencies of public transport, eliminating cost variables resulting from delays, maintenance and upgrades.

EvENTS

Mark your diary... Gulf TraffiC 2014 8–10 DECEMBEr, 2014, DuBai Gulf Traffic Exhibition & Conference 2014 will showcase the latest in road infrastructure, traffic management systems and technologies for safe and efficient mobility. This year’s edition will also host the region’s largest parking conference. Contact: richard Pavitt Tel: +971 4 4072606 Email: richard.pavitt@ informa.com www.gulftraffic.com

HAPPENING IN 2015

SAUDI WATER AND PoWER FoRUM 12-14 January 2015, Riyadh audi Water and Power Forum (SWPF) returns to Riyadh next year at a new location in Al Faisaliah Hotel. The 2015 edition also marks the 10th anniversary celebrations of SWPF, an annual forum and exhibition for water and power stakeholders in the Kingdom of Saudi Arabia. SWPF is held under the patronage of the Ministry of Water & Electricity and produced by CWC Group in partnership with Moya Bushnak. The event is supported by key industry stakeholders such as Saudi Electric Company (SEC), Saline Water Conversion Corporation (SWCC), the National Water Company (NWC) and K.A. CARE. SWPF is renowned for uniting Saudi and global stakeholders to debate policies and strategies which determine the future of the power and water sectors in the Kingdom. The 2015 event will focus on achievements attained in the past 10 years for both water and power sectors. It will bring together the key stakeholders involved in these sectors to

enable discussions, which will assist in shaping the Kingdom’s power and water agenda. The list of distinguished speakers includes HE Abdullah Al-Hussayen, Minister of Water and Electricity; HE Dr Saleh Alawaji, chairman of the board of directors, Saudi Electricity Company (SEC), and Deputy Minister for Water, Ministry of Water & Electricity; HE Dr Abdulrahman Al-Ibrahim, governor, SWCC; Dr Loay Ahmed Al-Musallam, CEO and member of board of directors, National Water Company (NWC); Paddy Padmanathan, president and CEO, ACWA Power; Phillipe Cochet, president, Alstom Thermal Power, and executive vice-president, Alstom; and Dr Fareed Al Yagout, president, National Power Company (NPC). The Annual SWPF Awards 2015 will take place during the inauguration ceremony on 12 January and will present the SWPF Award for Innovation alongside the Marafiq Award for Sustainability. Contact: Chris Hugall Tel: +44 20 7978 0084 Email: chugall@thecwcgroup.com www.ksawpf.com December 2014

SauDi rail aND lOGiTraNS 25-27 JaNuary, 2015, riyaDH The Saudi Rail and Logitrans Conference will bring together leading stakeholders involved in Saudi Arabia’s efforts to enhance its transportation infrastructure. Contact: aCM Tel: +961 5 959 111 Email: nour.naffi@ acm-events.com www.saudirailandlogitrans.com WOrlD fuTurE ENErGy SuMiT 19–22 JaNuary, 2015, aBu DHaBi Held under the patronage of HH Sheikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, the World Future Energy Summit (WFES) is the world’s foremost event dedicated to renewable energies, energy efficiency and clean technologies. Contact: Claude Talj Tel: +971 2 409 0409 Email: claude.talj@reedexpo.ae www.worldfutureenergy summit.com

INFRASTRUCTURE MIDDLE EAST

INFRASTRUCTURE MILESToNES

#010 Shindagha Tunnel After nearly 40 years of service, Dubai’s only underwater road crossing may be staring at retirement l Shindagha Tunnel, which goes under Dubai Creek to connect the city’s oldest neighbourhoods of Deira and Bur Dubai, was opened to traffic in 1975. It is the second oldest creek crossing (after Maktoum Bridge) and the emirate’s only (and the region’s first-ever) underwater road tunnel. It remains one of the busiest crossings on the Creek, with more than 110,000 vehicles using it daily. One of the dream projects undertaken by Shaikh Rashid Bin Saeed Al Maktoum, the then Ruler of Dubai, the tunnel was designed by Sir William Halcrow and his team, who also worked on several other major projects in Dubai during the 1970s and 1980s. The tunnel

INFRASTRUCTURE MIDDLE EAST

was designed to accommodate two traffic lanes in either direction, with a third bore for pedestrians. The underwater tunnel was built using a cofferdam, a technique which involves building temporary enclosures within the water body, allowing the enclosed area to be pumped out to create a dry work environment for the major work to proceed. At the time of inauguration, the structure design life of 50 years was determined by the design code procedure applicable at the time. However, salty creek water, low resistance to chloride ingress of the concrete and high ambient temperatures led to major repairs in 1986. The maintenance work involved special procedures to stop leakages and check the deterioration of concrete and oxidisation of steel.

December 2014

Fast facts First year of operation: 1975 Height clearance: 5 metres Length: 550 metres Speed limit: 60km/hour Designed lifetime: 50 years

Thereafter, a strict maintenance schedule has helped ensure that the tunnel remains in good condition. But as this iconic milestone in Dubai’s history approaches its 40th birthday, the authorities are looking to replace it with a multi-lane bridge, probably a suspension bridge. According to a recent article in Gulf News, when the Roads & Transport Authority (RTA) considered building another set of tunnels to replace the existing one, they found the project to be three times more expensive than building a bridge. The new crossing is likely to have four to six lanes in each direction so as to eliminate the current bottleneck at the tunnel, which causes huge tailbacks on either side during peak hours. The project, according to the same article, is set to be announced by early next year, with the tendering process to follow thereafter.