Utilities Middle East by ITP Business Publishing

Middle East

ESSENTIAL INSIGHTS FOR MIDDLE EAST WATER, GAS AND ELECTRICITY PROFESSIONALS

RENT, BUY OR LEASE Generator and compressor companies are still enjoying strong trading

August 2009

• Vol 3. Issue 8

WATER CONSERVATION How power and technology can make a difference to consumption

IRAQ IN PROFILE A struggling utility sector in need of help

uster b k c o l b t e g d g bu The GCC’s baind water projects power

D I R E C T O R Y O U T N O W !

www.utiliti es-me.com

An ITP Business Publication

CONTENTS

August 2009 Issue 8 2 COMMENT For those that make it through the summer the Gulf could still be a land of opportunity.

4 REGIONAL UPDATE A round up of some of the biggest headlines in the region.

10 SPECIAL REPORT Can utilities release cash flow from tightened coffers?

12 INTERVIEW UME visits Vienna and meets with the IAEA’s Holger Rogner.

20 16

16 INDUSTRY OPINION A look at how the generator and compressor sectors are doing.

20 TOP 10 Some of the biggest power and water projects in the GCC.

24 WATER CONSERVATION Power sources and technology can combine to reduce water consumption.

29 COUNTRY PROFILE Iraq is in need of help from its neighbours if it is to get through a utilities crisis.

32 PROJECT TRACKER A select list of current regional utilities projects.

34 TENDERS Opportunities available in the Middle East.

36 EVENT HORIZON Useful utility events coming up over the next few months.

40 PEOPLE METER David Hogan of Varis Energy on the benefits of Zigbee based wireless technology.

www.arabianbusiness.com

August 2009

●

Utilities Middle East 1

COMMENT Middle East

Land of opportunity? Sheer need will keep pushing the region’s utilities

Registered at Dubai Media City PO Box 500024, Dubai, UAE Tel: 00 971 4 210 8000, Fax: 00 971 4 210 8080 Web: www.itp.com Offices in Dubai & London ITP Business Publishing Ltd CEO Walid Akawi Managing Director Neil Davies Deputy Managing Director Matthew Southwell Editorial Director David Ingham VP Sales Wayne Lowery Publishing Director Jason Bowman Editorial Senior Group Editor Stuart Matthews Tel: +971 4 435 6293 email: stuart.matthews@itp.com Contributors Edward Attwood, Sarah Blackman, Dan Canty, Derek Canty, Ben Millington, Lutfi Qaraman, Ventures Advertising Commercial Director Jude Slann Tel: +971 4 4356348 email: judith.slann@itp.com Studio Group Art Editor Daniel Prescott Designer Angela Ravi Photography Director of Photography Sevag Davidian Chief Photographer Nemanja Seslija Senior Photographers Alan Desiderio, Efraim Evidor, Khatuna Khutsishvili Staff Photographers Khaled Termanini, Thanos Lazopoulos, Leila Cranswick, Jovana Obradovic, Rajesh Raghav, Ruel Pableo, Lyubov Galushko Production & Distribution Group Production Manager Kyle Smith Production Manager Eleanor Zwanepoel Deputy Production Manager Aamar Shawwa Production Coordinator Devaprakash Managing Picture Desk Patrick Littlejohn General Manager - Regional Distribution Shaded Ali Shaded Distribution Manager Karima Ashwell Distribution Executive Nada Al Alami Circulation Head of Circulation & Database Gaurav Gulati

Work on the region’s infrastructure needs continues.

Marketing

sense of frantic pace left the region months ago. Summer’s onset could easily have you believe it is some way from returning. However, some fundamental needs remain in play in the region’s utility sector. As seasonal peak loads are reached during the scorching heat of August, it is worth remembering that capacity expansion is still coming second in the race with demand. There are billions of dollars worth of projects under way, from the earliest bid stages through to the close of construction, all aimed at pushing capacity into first place. Governments have pledged significant investment for power and water projects to make this happen. Buying their way out of a recession may turn out to be a happy side effect; utilties are not the only area of infrastructure to benefit from investment. Wiley operators are also taking advantage of the opportunity to get a lower bid from contractors, as key material costs reduce from their 2008 peaks.

While the global ﬁnancial storm is proving a stern test for the GCC’s contractors, leaving them feeling battered by the economic headwind, the sturdier businesses among them have adapted. Where business may have dropped off in one location, it is still available in others, just a bit further away. Traditional revenue streams have also shifted. For instance, some equipment rental ﬁrms are doing well simply because their clients would once have bought the equipment they are now leasing instead. Other companies are working harder for new business and adapting what they offer to suit the current climate. Whatever the process involved, while these conditions prevail it may be painful, but leaner, meaner and perhaps wiser businesses, with a new eye for opportunity, are emerging.

● August 2009

ITP Digital Director Peter Conmy ITP Group Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin Circulation Customer Service Tel: +971 4 435 6000

Certain images in this issue are available for purchase. Please contact itpimages@itp.com for further details or visit www.itpimages.com. Printed by Atlas Printing Press LLC, Subscribe online at www.itp.com/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

Stuart Matthews Senior Group Editor

To subscribe please visit www.itp.com/subscriptions 2 Utilities Middle East

Marketing Manager Daniel Fewtrell Marketing Executive Masood Ahmad

www.arabianbusiness.com

Is there another name for success?

SIPROTEC – ﬁrst choice in protection worldwide and frequently certiﬁed.

E50001-U310-F26-V3-7600

Reliability and comprehensive functionality play a decisive role in protection business. That’s why SIPROTEC is in every protection engineers mind. • SIPROTEC devices satisfy with high flexibility, a homogeneous system platform, and the unique DIGSI operating tool. • Impressive performance and certified quality make Siemens the worldwide market leader for protection systems. • Over 1 000 000 installations in more than 140 countries are a fact that speaks for itself. www.siemens.com/siprotec

Answers for energy.

1844_SIPROTEC_Ad_en_V3_205x275.indd 1

04.03.2009 9:14:45 Uhr

REGIONAL UPDATE

Renewables to plug into grid Bahrain minister backs role of renewable energy in powering the island kingdom Bahrain’s Electricity and Water Authority (EWA) will soon allow renewable energies to feed power back into the national grid according to the minister in charge Fahmi Bin Ali Al Jowder. Al Jowder said he recently appointed a national committee involving a number of ministries to study renewable energy options for the country, including how the private sector could contribute. “Any renewable that is going to be produced by individual institutions has to feed back into the grid and they should get credit for that because we want to make renewable energies enticing,” he said. “But we have to assess how this will work and this is going to be part of the work that the committee will be doing.” Green groups have long been calling for governments across the GCC to allow building’s with renewable energies to tie into the grid and provide financial incentives for every kilowatt hour put back. Al Jowder said the committee held its first meeting last week and is expected to make its first recommendations in nine months which he will present to Economic

Bids invited for Oman projects The Oman government has issued requests for proposals for two major independent power projects in the north of the country. The projects, each with a capacity of 650 MW will be based at Barka and Sohar. The total capital investment in the two developments is expected to exceed US $1 billion, more than 45 prospective developers have already shown interest.

4 Utilities Middle East

●

August 2009

Fahmi Bin Ali Al Jowder, Bahrain’s minister in charge of the Electricity and Water Authority.

Board of Development (EDB). He added that a higher committee was appointed by the cabinet two weeks ago which will look into nuclear energy options. “We cannot continue to rely on natural gas to power our plants

which means we have to move into other areas and this is what we have started doing,” he said. “We are not just leaving it to eventualities, we are trying to plan for our future and look into the different available technologies.”

Al Jowder said Bahrain was one of the ﬁrst countries to sign up the International Renewable Energy Agency (IRENA) which formed in January and aims to promote the rapid transition towards sustainable us of renewable energy.

First phase in GCC-wide network link powers up Saudi Arabia, Qatar, Bahrain and Kuwait have all linked their power grids, in a landmark project that is planned to meet rising power demand and stave off outages. The UAE and Oman will join the US $1.4 billion scheme in 2011. Plans for the network link-up were first drawn up in 2004, and the first stages of the project have included the interconnection of the Qatar grid with Kuwait and the commissioning of the first

cycle of undersea cable between Bahrain and the main grid, both of which took place earlier this month. “With the successful linking of the electricity grids of Saudi Arabia, Kuwait, Qatar and Bahrain, the member countries are close to achieving their goal of having a joint power grid for all six member states,” said Yusuf Janahi, chairman of the GCC Interconnection Authority

(GCCIA), in a statement to the Arab News. “The grid aims at guaranteeing an adequate supply of power even in emergencies and also reducing the cost of power generation in member countries. There will of course be other economic gains.” The first phase of the project included a double-circuit 400kV, 50Hz line from Kuwait to Saudi Arabia. A similar line offers a submarine link to Bahrain. www.arabianbusiness.com

REGIONAL UPDATE

Water for capital city Pipeline to convey water to Jordan’s capital Amman A new US $1 billion project is being set up in Jordan to help alleviate a water shortage in the country’s capital city, Amman. The Disi Water Conveyance Project includes the construction of a 325km pipeline that will drive water from the Disi aquifer in Mudawarra to the capital. The project will be constructed thanks to funds that came from Gama Energy, a joint venture between Gama Holding and GE Energy Financial Services. The investment will create jobs and promote private sector participation in Jordan’s development. Commenting on the Disi project, Prime Minister Nader Dahabi of Jordan said: “This project represents a milestone towards ensuring water security and addressing the country’s water shortage.” Jordan’s water resources per capita are among the world’s lowest. Water is delivered only once a week to Amman’s residents. The Disi Water Conveyance Project is expected to supply Amman and surrounding areas with more than 100 million m3 of water per year.

Work on the pipeline is under way. When complete it will supply 100 milliom m3 per year.

“We take pride in the vote of confidence we won from the financial community by closing a $1 billion project amidst the worldwide economic downturn,” added Gama Energy managing director and board member Arif Ozozan. The first in a series of funding was made today, with construction expected to begin this month.The project’s construction is expected to take four years. It will use an estimated 250 000 tonnes of steel and involve the digging of 55 wells. Gama Energy will invest approxi-

mately US $190 million, the Ministry of Water and Irrigation of Jordan will provide a US $300 million grant, while the Overseas Private Investment Corporation of the US, the European Investment Bank and Proparco of France will collectively provide US $455 million in debt ﬁnancing. In 2007, the Government of Jordan awarded GAMA a concession to build and operate the water pipeline. The ﬁrm will own the project for a 25year concession period, after which it transfers to the Government of Jordan.

Marafeq Qatar lands a bumper utilities deal Marafeq Qatar has agreed to an MoU arrangement with the Lusail Real Estate Development Company whereby the former will provide the design, construction, ﬁnancing,

maintenance and operations of utilities at the Lusail City development. The ﬁrm will cover district cooling, waste collection, gas supply and will also provide the water and electric-

$1.26 billion

The value of the GCC market for water and wastewater treatment equipment in 2008. Source: Frost & Sullivan (see story p25) www.arabianbusiness.com

ity network studies at the 35 km2 site, which is located just north of Doha. “Marafeq Qatar’s utility solutions will signiﬁcantly contribute to our vision of Lusail as a breathtaking development that will dramatically improve our country’s economic and physical proﬁle,” said Mohamed Bin Ali Al Hedfa, CEO of Lusail Real Estate Development, according to the Gulf Daily News. Work will start in two of Lusail Development’s busiest sites, the Marina District and Fox Hills, before spreading across the whole of the project.

HIGHLIGHTS SETE SUCCESS Sete Energy has won the contract to complete the stage 3 expansion of an industrial wastewater treatment plant for Marafiq. The project is located in Jubail and encompasses the design, engineering, procurement, construction, testing and commissioning of a new plant that will expand current capacity by 55 000m3/day. Milan-based Foster Wheeler Italiana (Environmental) will provide detailed process design services to Sete Energy. The project is scheduled to take 24 months to complete.

PURE WATER Metito has been sub-contracted by Samsung to design, manufacture, supply, install and commission a demineralisation plant for the Shuweihat S2 IWPP in Abu Dhabi. The plant will produce high purity water to feed the boilers generating steam for the power turbines. The contract value is AED 6.35 million.

DESALINATION COSTS The maintenance and reconstruction of desalination plants under the control Saudi Arabia’s SWCC is expected to cost up to 1.4 billion riyals in 2010. SWCC will be attempting to rely solely on locally manufactured spares for the work. This move is part of the SWCC’s desire to support the national economy, encourage local manufacturers and achieve its aim of creating a nationally self-sufficient desalination industry.

August 2009

●

Utilities Middle East 5

REGIONAL UPDATE

Bangladesh inks deal on major power project Siemens CEO backs renewables as part of Saudi energy mix

Energy potential in KSA The CEO of Siemens has said the potential for renewable energy projects in Saudi Arabia is huge, while declining to comment on whether the company would help Middle Eastern countries with their nuclear power ambitions. “Projects with renewable energies have a huge potential in Saudi. The country has very large areas which would be suitable for wind or solar power due to its geographical position – investments which would pay off very quickly,” said Peter Löscher in an interview with Arabian Business. Switching to an energy mix with a signiﬁcant share of renewables would allow Saudi to retain its oil reserves for a longer period of time, the global head of the German conglomerate added. Earlier this month, Siemens was one of 12 major European companies to sign a declaration of intent to build a series of solar thermal power plants in the Sahara desert that would supply Europe with up to 20 percent of its energy by 2050. The project, called Desertec, would require an investment of

MICHAEL GOTTSCHALK/AFP/Getty Images

Rolls-Royce, a power systems company, has announced that it will provide a 40MW power solution for the biggest shopping and entertainment complex in Asia. Jamuna Builders has ordered six Rolls-Royce gas engines to provide power for its Jamuna Future Park, now under development in the Bangladeshi capital, Dhaka. The six, 16 cylinder, gas fuelled engines will generate electricity in power.The project is a largescale seven-floor development combining leisure, retail and exhibition facilities. The Rolls-Royce plant will provide power for facilities including 118 escalators, 26 large lifts, three mobile walkways, a hypermarket, entertainment centres and a children’s theme park. The power plants will be supplied in two phases. In the first phase, three engines will be delivered by the end of 2009, each driving an electrical generator to supply 6.81MW of uninterrupted power, independent of the region’s grid.

Peter Loescher, CEO of German industrial giant Siemens.

around US $571 million. Löscher declined to comment on whether Siemens had plans to help the UAE, or any other Middle Eastern countries, with their nuclear power ambitions. The company is currently embroiled in a bitter dispute with France’s Areva to exit the two companies’ US $2.855 billion joint venture in developing new nuclear reactors.

Earlier this year Seimens announced a deal with Rosatom, the Russian state owned nuclear group, to create another joint venture. “The talks with both companies are ongoing, so…I cannot comment on any questions related to those business activities,” he said. “But one thing is clear: In the future there is a huge potential for such kind of business.”

Bahrain moves to finance vast utilities deals

Billion kilowatt hours of electricity imported by Iraq during 2008 (estimated). See story page 29 6 Utilities Middle East

●

August 2009

Bahrain’s cabinet has approved plans to obtain a US $1.3 billion loan to ﬁnance power and water projects in the country. Of this sum, US $849 million will be spent on upgrading 220kV and 66kV electricity projects over the next ﬁve years. The other $477 million will go towards improving Bahrain’s water network. The same cabinet session also approved the building of 10 more power stations, the expansion of four others, and the installation of

380 km of underground cables. Bahrain is already building 29 66kV stations, and expanding the water grid. Limited recourse financing for the US $2.1 billion Al-Dur IWPP project has also been completed, according to an announcement from The Gulf Investment Corporation (GIC) and French engineering contractor GDF Suez. “The success of this major finance agreement is strong evidence of the confidence of the banking community in the strength of the con-

sortium and the economic development of Bahrain,” Guy Richelle, CEO of GDF Suez Energy MEAA region said in a statement. A group of ﬁve prominent institutions have entered as new shareholders in the project. The Social Insurance Organization of Bahrain, Instrata Fund, Capital Management House, Bahrain Islamic Bank and First Energy Bank have joined GDF Suez and GIC in the project. GDF Suez will remain the largest shareholder with a 45% stake. www.arabianbusiness.com

REGIONAL UPDATE

SEC extends key bid deadline Falling costs could bring savings to company as it gives bidders more time Citing the possibility of saving money due to a fall in costs, Saudi Electricity Company (SEC) has extended the deadline for bids to build a 2 400 MW power plant in Rabigh by three months. The estimated cost of the plant has dropped by 20% to around US $4 billion. Contractors now have until October 31 to submit their bids. The Rabigh expansion accounts for around 12% of the extra 20 000 MW SEC is planning to come online between now and 2018, at a total cost of US $80 billion. SEC has also signed a deal with a Korean consortium to build a 1,200MW power plant in Rabigh. The consor-

www.arabianbusiness.com

tium is led by Korea Electric Power Corporate and includes Saudi ﬁrm ACWA Power International. SEC will own a 20% share of the project. The plant will be built in two phases, with 600MW coming online in 2012 and the remaining 600MW becoming available in 2013. Funding for this and other projects seems secure after the SEC signed a US $690 million loan (SAR2.6 billion). A recent research note from the Kuwait Financial Centre ‘Markaz’ asset management ﬁrm stated that Saudi Arabia was responsible for around 56% of the GCC’s total electricity usage between 2002 and 2007.

SEC is looking for cheaper bids for its 2400MW Rabigh project.

August 2009

●

Utilities Middle East 7

INSURING PROGRESS.

MAKE PROGRESS. Taking on the responsibility of risk is what we do at ACE. With our expert underwriting, superior claims handling and local market experience in the MENA region, you can focus on the possibilities, not the liabilities, to make progress in your business. For more on the ACE group of insurance and reinsurance companies please visit www.ace-mena.com or email mena@acegroup.com ENERGY

ÂŠ 2009

PROPERTY & CASUALTY

ACCIDENT & HEALTH

MARINE

CONSTRUCTION

FINANCIAL LINES

Coverages underwritten by one or more of the ACE Group of Companies. Not all coverages available in all jurisdictions.

INSURING PROGRESS

REGIONAL UPDATE

Capacity needs boost Report identifies big generation gap that needs plugging

More capacity needs to make it off the drawing board and into active service to meet the region’s power needs.

The GCC still requires investments totaling US $37.1 billion to add another 24,734 MW of generation capacity to its grid by 2014 if it is to match the growing demand for power in the region. That’s according to a report published by the Kuwait Financial Centre ‘Markaz’ asset management ﬁrm, which explains that population growth and increased immigration is leading to increased

demand for modern and efﬁcient infrastructure. The report says the growing demand for power has meant that installed capacity increased from 46,579 MW in 2002 to 73,339 in 2007, at a rate of 10% a year. Saudi Arabia and the UAE together accounted for 72% of the region’s installed power generation base in 2007. However, Saudi Arabia (56%) and

Kuwait (13%) were the largest total consumers of electricity between 2002 and 2007. The Markaz note also reported that countries with a strong macroeconomic outlook, such as Qatar, would find it easier to complete required infrastructure work, but noted that others might need to find alternative means of financing mega projects, such as debt issuances and large loan syndicates.

Yanbu turns to Korea for a power increase Saudi Arabia has signed a US $720 million deal with a South Korean firm to increase energy output at Yanbu Industrial City, it has been reported. Marafiq power and water utility company awarded the contract to Hanwha Engineering and Construction Company to build two steam turbine generator plants at Yanbu, reported the Saudi Gazette. “Because of the rapid industrial expansion of Yanbu, the new power generation plants will greatly enhance our power capacity and will help us meet the evergrowing utility demand of the industrial sector,” said Thamer Al-Sharhan, president and CEO of Marafiq. Construction work is expected to take 36 months. Once operational the plants will increase Marafiq’s power output to 1 500 megawatts. The first unit is to start commercial production by May 2012 and the second to be commissioned by July 2012. The Yanbu Industrial City is undergoing major expansion works, like Jubail. Officials said subcontract work will go to local contractors who meet the standard criteria, the paper reported.

ABB wins US $34 million Saudi power job to improve network ABB has won a US $34 million (SAR128 million) order from Saudi Arabia’s national power transmission and distribution utility, Saudi Electricity Company. The work will involve correcting the power factor to increase capacity and efﬁciency in the power grid and include the refurbishment and www.arabianbusiness.com

expansion of 20 distribution substations to strengthen the network in the western provinces of the country. This is expected to enable the Saudi Electric Company to meet growing demand for electricity and improve power quality. “ABB is already executing several turnkey substation projects in

the region,” said Peter Leupp, head of ABB’s Power Systems division. “These new projects will support the country’s efforts to increase power capacity and grid reliability.” ABB is responsible for the design, engineering, supply, installation and commissioning of the measures to improve the substations. The prod-

ucts supplied will include capacitor banks, medium-voltage switchgear, protection and control equipment, and a Supervisory Control and Data Acquisition system that will enable the utility to manage the ﬂow of power in the network. The project is expected to be completed by the end of 2010. August 2009

●

Utilities Middle East 9

SPECIAL REPORT: CASH FLOW

Finding cash in the utility George Sarraf looks at ways to find much needed cash in the supply chain Executives need to actively seek out ways to preserve cash in supply chain management (SCM)-related activities. By engaging the CFO and the executive team in an active review of current and planned expenditures and programmes, utility companies can ﬁnd and free cash in various areas of the supply chain. The fastest way to preserve SCM-related cash is to stop buying. It may seem like an obvious step, but many companies do not change their spending patterns until internal operating and capital budgets are scaled back. Of course, utility companies that stop buying can’t shut down purchasing activity completely. Instead, most can beneﬁt from an aggressive, comprehensive review of major spend on open orders, as well as expenditures committed. Many of these orders and requests were likely generated before the economic shift and represent future

10 Utilities Middle East

●

August 2009

work that is being deferred or cut from budgets. By sorting outstanding orders and requisitions, management can ﬁnd opportunities to cancel or defer requirements. Suppliers and contractors may balk at cancelled orders, but they understand current economic challenges and many are willing to make signiﬁcant short-term concessions for long-term stability. Inventory is another area of immediate cash conservation, as well as an opportunity to cancel or delay open orders to avoid future cash leakage. For example, one utility re-examined its transmission and distribution (T&D) inventory and realised that a number of transformers were stockpiled in one region for a major reliability project that was delayed. The company redeployed these transformers to other regions, enabling cancellation of open orders and requisitions, saving the utility a major cash outlay.

George Sarraf, principal with Booz & Co.

This is also a good time to reexamine overall inventory levels. Over the last few years, most utilities have been scrambling to ensure that material was available to support an increasing workload. The aftermath of storms and an overall increase in demand were taxing suppliers’ ability to deliver sufﬁcient quantities of

many basics such as transformers, leading to concerns about supply security. As a result, many utilities increased inventory levels, absorbing cash in the process. As overall demand drops and supply concerns have eased, there may be more inventory on hand than needed. One utility recently analysed its inventory to determine where it could be reduced and found that 80% of items were overstocked relative to its targets. Even after adding inventory dollars to restock needed items, this represented a signiﬁcant opportunity for net inventory reduction and cost savings. Accounts payable terms and processes are another potential source of near-term cash. This does not mean utilities should abuse suppliers by arbitrarily delaying payments. Rather, they should seek out cashsaving opportunities. For example, most utilities have agreements with a portion of their suppliers that www.arabianbusiness.com

SPECIAL REPORT: CASH FLOW

either allow the utility to pay quickly in return for a speciﬁed cash discount (ie: 2% when the invoice is paid in 10 days) or to pay the full amount in 30 days. Possibly the most signiﬁcant way to reduce procurement costs for materials and services is to rethink

7% Price reduction for power transformers identified through cost modelling.

www.arabianbusiness.com

“One utility recently analysed its inventory to determine where it could be reduced and found that 80% of items were overstocked relative to its targets.” spend category strategies. In many cases, suppliers have been passing along major increases in their cost of business due to price pressures on commodities such as steel. However, overall price increases may not have reﬂected the true underlying costs across the supply chain. There is an opportunity to reevaluate and renegotiate category strategies and pricing arrangements with an eye toward different arrangements - for example, fair-return pricing.

In a fair-return pricing arrangement, the buyer agrees to pay the supplier a price tied to the underlying fundamental costs of materials or services rather than perceived supply and demand balances. This generally means that the supplier will make more in a downturn but less in an up-cycle. However, this structure also provides suppliers with more consistent income streams. Similarly, the buyer may appear to pay a bit more during the

down-cycle, but generally will pay much less in the up-cycle, particularly when there are price spikes in the market. Suppliers are now much more open to discussions about alternative strategies and pricing structures as their businesses are challenged by the downturn. However, utilities have to be prepared for these discussions to structure a true fair-pricing arrangement. To do so, the executive team must understand the total cost and dynamics of the supply chain For example, at one utility, such cost modelling identiﬁed an additional 7% price reduction for power transformers. While the supplier had reduced its prices, the cost modelling exercise revealed that it was also pocketing a portion of the price differential as commodities fell, whereas it generally passed through all of the increases during the up-cycle.

August 2009

●

Utilities Middle East 11

INTERVIEW

Energy system Holger Rogner of the International Atomic Energy Agency speaks to UME about the place of nuclear power within the energy mix

12 Utilities Middle East

â&#x2014;?

August 2009

www.arabianbusiness.com

INTERVIEW

n the early 1950s a landmark speech, delivered by the then US President Dwight Eisenhower, proposed the idea of an international body that would oversee and support the development of atomic energy. Just a year later the International Atomic Energy Agency (IAEA) came into being. Since then, the organisation has evolved to embrace a wider energy remit, with a particular focus on developing countries. Holger Rogner is a programme leader and section head, Planning and Economic Studies Section (PESS) for the IAEA’s department of nuclear energy. His portfolio of responsibilities includes capacity building in developing countries for energy and environmental analysis. “This isn’t just nuclear speciﬁc,” he said. “We look at the full energy system. This involves looking at resource endowment, through to technological capabilities, supporting infrastructure, and what the cost-optimal energy mix is over the next 25-30 years. Meeting energy security objectives and measuring environmental impact are the main thrusts of my remit.” In this context Rogner sees the development of a nuclear industry in the Middle East as a rational decision, regardless of oil wealth. “If the oil price is high, countries www.arabianbusiness.com

in the Middle East can get more economic beneﬁt from selling that oil, rather than burning it at home,” he said. “You have to diversify your energy systems. Even if now you are well endowed with oil and gas, in the long run you may ﬁnd that it is simply too precious to simply stick in a power plant. Other sectors such as transport and petrochemicals rely on these resources too.” It is a strong argument and one that regional leadership has been keen to latch on to. Nuclear programmes would also help diversify the economies of participating nations. Spin offs from the nuclear industry are expected to be high

“These PPPs are certainly something we have looked into, but nothing has materialised,” said Rogner. “In those countries where it was most needed, governmentprivate partnerships of this kind are more or less unprecedented. Nobody really knows how it would function, and nobody wants to be the guinea pig.” That said Rogner still sees room for manoeuvre in traditional nuclear powered countries. He cites European nations where site planning and environmental analysis has been done and things continue to progress, regardless of the ﬁnancial downturn. Part of the reason for this is the estab-

“People often wonder why Saudi Arabia would want a nuclear power industry, but from a pure economic analysis, it makes sense.”

value and knowledge based, qualities sought by regional economies. “People often wonder why Saudi Arabia would want a nuclear power industry,” said Rogner. “But from a pure economic analysis, it makes sense.” The long-term commitment and heavy-weight ﬁnancing required for a nuclear programme make it tricky for countries to get out of the starting blocks. While public-private partnerships have been mooted, none have got off the ground.

lished funding of European utility companies. Further support for continuing European programmes comes from the need to improve and replace existing capacity. Many of the current crop of power plants came on stream in the 1970s and are gradually reaching the end of their technical lifespan. In countries such as France and the UK the IAEA’s role is primarily a safety one, because these nations can do their own capacity planning and economic analysis. This puts the

IAEA’s emphasis on working with developing countries. “Their focus is driven not only by market activity and energy security, but also real demand-side energy issues,” said Rogner. “To advance their own economic development aspirations they have to produce more energy.” The resurgent interest in nuclear energy has been sparked by a combination of factors. Issues of energy security, climate change and volatile energy pricing have all made nuclear look good. This has lead to a number of countries wanting to join the nuclear pack. Rogner identifies India and China as the main contenders ‘by a long-shot’. But these are not the only countries giving it consideration. “Other developing Asian countries also have grid capacities that would accommodate a nuclear power option,” said Rogner. “Many are not yet at a stage where nuclear would fit into the system as an economically viable part of the matrix. Nuclear power is not something you can dip into, switch on and switch off. It’s a long term commitment which requires a substantial infrastructure development. “In order to develop this infrastructure you need the educational support structure, and you can’t start that early enough. Even if nuclear is on a country’s horizon 20 or 30 years from now, all of the development that can be started now is beneficial.” Development for China is an issue of need and nuclear is one among many options the country is exploring. But it and all other countries interested in nuclear as an energy source must consider a August 2009

●

Utilities Middle East 13

INTERVIEW

host of issues. First among these is overall grid capacity. “We have a rule of thumb that the largest unit should not exceed more than 10% of grid capacity,” said Rogner. “So in case a plant has to come off the grid, the whole system isn’t negatively affected. When you limit the scope to the countries that this applies to, the list shrinks quite fast. “You also need to look at the financial capacity. Nuclear energy has high up front costs but is cheap to operate. To get to the benefits of cheap operation you have to overcome the hurdle of initial investment. “There are not too many countries that can fund that out of petty cash. What we have seen is countries like the United Arab Emirates, which has the cash and the history of involving outside help, being in a unique position to move faster than countries such as Vietnam, Indonesia or Malaysia, where the cash and cultural aspects are quite different.” When it comes to other resources, specifically uranium, there is not much of an issue to answer. Resource availability is an interplay between demand, prices, technological development and knowledge. While these are rarely in synch, uranium is plentiful. However, that fact hasn’t stopped the uranium market being out of balance since the collapse of the Soviet Union. For several years, Rogner says, production was at 40% – 60% of the reactor requirement globally. This was because of all the fuel that was stockpiled in the cold war. This reduced the need for exploration and mines closed because they weren’t viable. As nuclear plants in the US were given lifecycle extensions the market began to panic and uranium prices shot through the roof. “Companies then began pulling 80-year-olds out of retirement – uranium geologists, experts in the field – and now things are returning to normal,” said Rogner.

14 Utilities Middle East

●

August 2009

Holger Rogner: “We have a 19 point plan which we share with what we call the newcomers.”

“Time and again we see these cycles in any resource based industry. You can draw lots of parallels with oil, where the industry starts looking in lower-concentration environments, deploying newer,

and extend the fuel’s life for several hundreds or thousands of years, so scarcity is not really an issue.” While current economic issues have created problems of all sorts, not just for power, few countries

“What we have seen is countries like the UAE, which has the cash and the history of involving outside help, being in a unique position to move faster than countries such as Vietnam, Indonesia or Malaysia”

more expensive technology. “There are enormous amounts of uranium resources locked in unconventional forms. The ultimate back-stop technology would be extracting uranium from sea water. Through recycling and reuse you can automatically convert

are ready to move ahead with their programmes, though planning for nuclear development is continuing. “It’s a 15 year process and they know that if they recover from the current economic crisis, they will be faced with capacity problems,” he said.

“We have a 19 point plan which we share with what we call the newcomers. Countries need a nuclear law, they must adhere to all the international agreements and treaties and conventions, otherwise nobody will sell you the technology. You need a regulator, you need a safety culture, you need an educational framework.” Rogner says it is not unusual for countries to want a high localisation factor, to keep most of the value in the country. Key to achieving that is a home-grown quality workforce. “These things cannot be done overnight and so a timely plan is necessary. That’s what we try to convey to countries; the scale of what’s necessary to achieve a safe nuclear industry,” said Rogner. “A domestic support structure is extremely important, but other considerations such as where do I get my fuels from, how do I deal with my waste etc. These do not all have to be in place 10 years before, but they must be on the radar, and be worked towards.” www.arabianbusiness.com

INDUSTRY OPINION

Market view UME asks three sector leaders in generators and compressors how business is shaping up in 2009

he global financial crisis has become the biggest influencing factor for just about every industry. While its effects have been widely felt, companies continue to adapt to the new market conditions. The sales and rental market for generators and compressors is a case in point. Although there have been significant changes in the region, companies remain focused on their core businesses, while working hard to take advantage of whatever competitive edge they may have. For some this is renewed endeavour in sales and marketing, for others it is research and development, and others are staying steady on a long-term course. Whatever the case, while things are definitely tougher, opportunities are still out there. UME talks to representatives from three generator and compressor companies to see how they are finding business…

16 Utilities Middle East

●

August 2009

www.arabianbusiness.com

INDUSTRY OPINION

Dubai has been our main market since we started in business. However, several cities in the Gulf have been active even during the economic downturn. The demand for rental power and cooling in Abu Dhabi, Doha, Riyadh, Al Khobar and Jeddah has started picking up. I would not call it geographic shift but geographic dispersion. Therefore, the rental power business will still support the Dubai market and simultaneously support emerging markets like Abu Dhabi, Doha, Riyadh, Al Khobar and Jeddah.

RSS kit in operation on site in Dubai, where summer sees the peak rental period for portable cooling equipment.

LEE COX RSS How’s business? We speak as both buyers and providers of generators. Business has been slow for the first quarter and has slowly pickedup in the second quarter of 2009. Every industry has been quiet for the first and second quarter. Several projects were moved from the first and second quarter. This means that projects were not totally cancelled, but clients were probing the status of their financial situation, and this has led to delay some of the projects. But when the summer season started to peak, orders from various industries started to pour in. We believe that companies in the UAE have already sorted out their financial models and were able to stabilise their cash flow problem. Currently, RSS is still buying equipment to meet the demand of the UAE market and the GCC in general. The demand for rental power (as well as rental cooling) www.arabianbusiness.com

exceeds our supply. As a rental provider, we always expect that summer will be our peak rental period. There are companies that require additional cooling capacity and that is why they need temporary chillers and the rental generators to power them. Furthermore, the projects which were put on hold in the ﬁrst quar-

How has the focus of your business changed since the ‘economic downturn’? Our tactical plans were adapted to the changing business climate, so our sales efforts were doubled, operations have been more efﬁcient and recruitment was put on hold. But, as a rental provider of generators and chillers, our strat-

“Currently, RSS is still buying equipment to meet the demand of the UAE market and the GCC in general.” Lee Cox, RSS

ter of 2009 have started to resume in the third quarter. We are now seeing construction projects and various industry activities gaining momentum. These two factors (seasonal peak demand and resumption of projects) are our economic barometer, which tells us that there is a light at the end of the tunnel.

egy remains the same. Our strategic plan is to expand geographically in the GCC, then the Indian subcontinent, then Africa, then Asia. Our focus is to penetrate new territories and manage them sustainably. Have you seen a geographic shift in the source of your business, if so where to?

What are your plans for sur viving and thriving as a business over the next 18 months? Our strategic goal is to expand geographically by targeting new territories in the Middle East, the Indian sub-continent, then Asia. Late last year, we signed a joint venture with one of the biggest conglomerates in Saudi Arabia and Bahrain, the Al Shoaibi Group. Early this year, we appointed Dyarco, a subsidiary of Al Faisal Holdings, to look after the Qatar market. And last month, we have inked a joint venture with Mubadarah Investment for our Oman operations. I believe that RSS will be able to expand its geographic reach in two more territories within 18 months. Are you experiencing any new technology demands from customers and how are you responding to them? Customers are geared towards efficiency, to save money. What’s your one top tip for sur viving and thriving in the economic crisis? Managing cash flow is the key to surviving the current economic condition. In macro management, I would suggest that managers need to identify, find options and install the most pragmatic business model that will adapt to the current condition. August 2009

●

Utilities Middle East 17

INDUSTRY OPINION

MICHAEL SAGERMANN ATLAS COPCO How’s business? Under the current economic climate our impression is that business for Atlas Copco is generally good. Order intake and revenues have been put under pressure, but this is same for everyone. The market is dynamic, ever changing, and market share is always a better indicator of how well our business is developing. We adapted our local strategies early enough when the market showed signs of slowdown, which today we see has increased our market share. How has the focus of your business changed since the ‘economic downturn’? Whether in times of economic boom or struggle Atlas Copco’s focus has always been, and will continue to be, to offer our customers the best overall value for our products and services. We see some market sectors [where] we give additional attention, as not all sectors presently suffer, but generally speaking our focus remains unchanged. Has there been a change in the balance of your business, between sales and rental, or in the length of contracts? The resultant weakened customer conﬁdence from the crisis has ben-

18 Utilities Middle East

●

August 2009

eﬁted our rental operations. Some companies opt to rent, in lieu of capital investment, as there’s not yet any guarantee of timing to when major works contracts will be released. This is clearly apparent as Atlas Copco’s rental operations growth has accelerated in the last 12 months. We also see an increased contribution by our aftermarket business. Have you seen a geographic shift in the so urce of your business, if so where to? Overall, only in relative small percentages. Of course the enhanced downturn of the construction market in Dubai has impacted the contribution by the UAE. Meanwhile, we see other areas where business ﬂourishes, such as Saudi Arabia and Lebanon. What are your plans for surviving and thriving as a business over the next 18 months? Simply put, we have to continue to offer more value. Customers don’t buy a product, but rather a sum of performances and services. Their choice is based on foreseen superior value versus the competitor offer. Are you experiencing any new technology demands from customers and how are you responding to them? We see this as the other way around. Atlas Copco’s strategy has been

to continually innovate and introduce new products, or enhance current products, to be even more competitive in the market. The depth of Atlas Copco as a company allows us to continue to invest in new products and technologies, keeping us ahead of the competition. The goal is to increase our customers’ productivity through innovative solutions. For example, 80% of our Portable Division (diesel-driven air compressors and generators) product portfolio is less than three years old in design. This year is no exception as thus far we’ve introduced two new compressor ranges, two new generator ranges and a new dedicated lighting tower, which is up to 20% more eff icient in fuel use versus most competitor offers. Parallel to technological demands, Atlas Copco also gives great attention to the environmental impact of our products. Our compressors and generators offer better fuel efﬁciency, less

noise, and protective features such as spillage-free containment bases helping protect the local environment. We see this as our obligation to ensure the environmental impact is minimised. In light of this, another exciting new technology is our Carbon Zero, TÜV certiﬁed range of air compressors, where our customers can now recover up to 100% of the input energy by converting the input electrical energy into heat through our built-in energy recovery system. What’s your top tip for thriving in the economic crisis? Exceed customer expectations. Offer top quality products and services, and making certain their interests are kept in the forefront of each employee’s mind. If we don’t take care of our customers, then certainly someone else will.

Atlas Copco has seen a rise in its rental operations following the downturn.

www.arabianbusiness.com

INDUSTRY OPINION

CARL BRIDEN KAESER KOMPRESSOREN How’s business? Business is now picking up after a slow start. All markets sectors were quiet compared to last year, but there are signs that conﬁdence is beginning to return. How has the focus of your business changed since the ‘economic downturn’? Our focus has always remained the same. To ensure our customers receive professional advice, service and support. In the case of new business opportunities we remain committed to providing technically correct and energy efﬁcient solutions. The only real change has been to ensure we leave no stone unturned in pursuit of potential new business.

www.arabianbusiness.com

Has there been a change in the balance of your business, between sales and rental, or in the length of contracts? Kaeser is not directly involved in the rental business. Through our network of dealers we offer sales and after sales service of both construction and stationary compressors. Having said that, we are aware that some clients have chosen the rental route for a short term with a view to reviewing the market again at a later date. What are your plans for surviving and thriving as a business over the next 18 months? Our plans will not change. We are expanding our work force in the next 18 months and will continue our efforts to support our dealers and end customers alike, with even greater energy and commitment.

Are you experiencing any new technology demands from customers and how are you responding to them? Kaeser is always looking at ways to develop, where possible, our product range in response to market requirements. We are in an enviable position to be able to cover almost every application with an energy efﬁcient and reliable solution and where necessary, effect changes if it is deemed necessary. Such changes are engineered within our own research and development centre in Germany, where we can simulate any kind of operating condition, to ensure the most reliable results. Kaeser looks to provide energy efficient and reliable solutions.

August 2009

●

Utilities Middle East 19

TOP 10

GCC POWER AND WATER PROJECTS Regional power and water projects are worth billions, here’s the proof

The GCC’s top 10 power and water projects

Regional power and water projects are worth billions, here’s the proof

The six GCC nations are spending billions of dollars on the capacity expansion of their power and water networks. Here, UMEplaced takes a look at the ten most valuable expansion all addedhave to theall demand placed he six growth, GCC nations are spending bil- cation Population industrial diversifi and have expansion added to the demand on supply. Growth in lions of dollars on the capacity expan- on supply. Growth in demand is being dealt with power and water projects from around the GCC. demand is their being dealt on, resulting in someinmassive newnew projects, well as issubstantial extension works. based on estimated or actual value of head on, resulting some massive projects as Selection sion of power andwith waterhead networks. the works. All projects are currently active as well as substantial extension works. Population growth, industrial diversiﬁ cation and Here, UME takes a look at the ten of the most valuable power and water projects from around the GCC. Selectionjobs, is based on estimated or actual value of the works. All projects are currently active jobs, ranging from the early tender stage through to the closing stages of construction and commissioning.

20 Utilities Middle East

●

August 2009

www.arabianbusiness.com

TOP 10

KUWAIT: Shuaiba North Power and Desalination Plant YASSER AL-ZAYYAT/AFP/GETTY IMAGES

The project for the construction of the AlZour Desalination Plant in Kuwait is split into two phases. Both phases will consist of 1500 MW of power capacity, with a combined water capacity of 125 million gallons per day. Parsons Brinckerhoff International has been appointed as the main consultant and the tender for the main construction contract of phase two has already been issued. The deadline for bid submission is 8 September 2009. An award for the main construction contract is expected to be announced in first quarter of 2010. MAIN CONTRACTOR: Parsons Brinckerhoff International Incorporated

Industrial infrastructure is essential for Al-Shuaiba, which is also has an advanced pier system for the local refinery industry.

KUWAIT: Al-Zour Desalination Plant

Contracts are still to be awarded.

The project for the construction of the Al-Zour Desalination Plant in Kuwait is split into two phases. Both phases will consist of 1500 MW of power capacity, with a combined water capacity of 125 million gallons per day. Parsons Brinckerhoff International has been appointed as the main consultant and the tender for the main construction contract of phase two has already been issued. The deadline for bid submission is 8 September 2009. An award for the main construction contract is expected to be announced in first quarter of 2010. MAIN CONTRACTOR: Parsons Brinckerhoff International Incorporated

BAHRAIN: Al Dur IWPP

OMAN: Al Duqm IWPP

The Al Dur power and desalination plant in Bahrain is being developed on a build, own, operate basis by a consortium composed of GDF SUEZ and Gulf Investment. The project has seen lucrative contracts awarded to large international players and will be located at Al Dur. The plant will consist of a combined cycle gas turbine power plant and a reverse osmosis

The Al Duqm IWPP is currently on the books as the first coal-fired power plant in the GCC. If it goes ahead the proposed plant is expected to have an electricity capacity of 1 000 MW. Legal, financial and technical advisory tenders have all been issued. A Request for Proposal for the main construction contract is expected in the second quarter of 2010. Evaluation of the proposals and the subsequent award of contracts are expected in the final quarter of 2010. The plant is not expected to start commercial operation until 2015 at the earliest. The rising price of gas, as well as supply and demand issues drove the decision to look at coal as Oman looks to diversify its electricity generation fuel sources.

Al Durr contracts were eagerly awaited.

www.arabianbusiness.com

desalination plant, together with all support facilities such as seawater intake and discharge structures and gas connection. Once operational it will have a capacity of 1234 MW of power and 218 200 m3 per day. Mott Macdonald is the technical advisor and BNP Paribas SA is the financial advisor. Hyundai Heavy Industries was awarded the EPC contract. General Electric (GE) will supply the power plant turbines and Degremont will supply and install the desalination facility. MAIN CONTRACTOR: Hyundai Heavy Industries (EPC Contractor) MAIN CONTRACTOR: General Electric (Power Plant Turbines ) MAIN CONTRACTOR: Degremont & Marubeni Corporation (RO desalination facility) MAIN CONSULTANT: Mott Macdonald (Technical Advisor)

Al Duqm could be coal-fired.

August 2009

â&#x2014;?

Utilities Middle East 21

TOP 10

QATAR: Ras Girtas Power & Water Plant BORIS HORVAT/AFP/GETTY IMAGES

The Ras Girtas power and water plant in Qatar’s Ras Laffan is expected to have a capacity of 2 730 MW, combined with a potable water output of 63 million gallons per day. The EPC contract went to Mitsui Corporation of Japan, which in turn sub-contracted Hyundai, Mitsubishi Heavy Industry and France’s Sidem. Completion of the project’s first phase is scheduled for 2010, with full project completion expected in April 2011. Ras Girtas Company for Power is a joint venture between Qatar Petroleum (15%), Qatar Electricity and Water Company (45%), GDF Suez of France (20%), Mitsui Corporation (10%), Chubu Corporation of Japan (5%) and Shikoku Corporation of Japan (5%). MAIN CONTRACTOR: Mitsui Corporation of Japan

Gerard Mestrallet, CEO of GDF Suez, which has a 20% stake in Ras Girtas.

QATAR: Mesaieed Independent Power Plant (IPP)

Mesaieed’s industrial strength will rise with power plants and an aluminium smelter planned.

The Mesaieed Independent Power Plant (IPP) project combines a 2 000 MW power plant with a large substation. The plant output will serve the national grid and the planned Mesaieed aluminum smelter. Iberdrola Ingenieria Y Construction won the EPC contract in November 2006. Fichtner Consulting Engineers is the technical advisor. GE was awarded the contract of installation six Frame 9FA gas turbines, two Frame 6B gas turbines, six 330H type generators, and three D11 steam turbines. The project is expected to be completed in the second quarter of 2010 and Qatar Petroleum will supply gas for the plant. MAIN CONTRACTOR: GE (Turbines Supplier) MAIN CONTRACTOR: Iberdrola Ingenieria Y Construction MAIN CONSULTANT: Fichtner Consulting Engineers (Technical Advisor)

UAE: Hassayan power and desalination plant The Dubai Electricity and Water Authority’s Hasssyan power and desalination complex is planned to be a huge plant made up of six stations (P1, P2, Q1, Q2, R1, R2) each with a gross capacity of around 1 500 MW and between 100 - 120 million gallons per day of desalinated water. Configurations on the drawing board include gas turbines with associated heat recovery steam generators, auxiliary boilers, backpressure steam turbines and MSF desalination units. The project will also include infrastructure for water

storage and distribution. Mott Macdonald is the consultant for P1, while Lahmeyer is the consultant for P2. DEWA initially planned to build two water and power plants at the site simultaneously. In February 2009, DEWA delayed the tender for the P2 stage to September 2009. P1 was put on hold due to the high prices of bids submitted. MAIN CONTRACTOR: Mott Macdonald (P1 Stage) MAIN CONTRACTOR: Lahmeyer Intl (P2 Stage)

The many phases of the proposed Hassayan power and water project are intended to supplement Dubai’s ‘G’ station.

22 Utilities Middle East

●

August 2009

www.arabianbusiness.com

TOP 10

SAUDI ARABIA: Shuaiba power plant, stage 3 Located 100 km south of Jeddah, this project involves the construction of a 1200 MW plant adjacent to the existing Shuaiba facility. Alstom won the main construction contract for the expansion package in July 2008. Construction is in progress and expected to be completed in early 2013. When finally complete the Shuaiba power station will be made up of 14 units, each of 400 MW, adding up to a gross total output of 5600 MW. As leader of the construction consortium, Alstom is designing, supplying, installing and commissioning the entire plant. Key components include oil-fired boilers, STF40 steam turbines, GIGATOP turbogenerators, sea-water flue gas desulphurization and auxiliary equipment. The boilers are designed to burn both crude and heavy fuel oil. Alstom’s consortium partner, Saudi Archirodon, will carry out all the associated civil and marine works. MAIN CONTRACTOR: Alstom

The steadily expanding Shuaiba facility is located 100km south of Jeddah.

SAUDI ARABIA: Jizan Economic City (JEC) - Power Plant CPI Power Engineering was awarded the main construction contract in November 2008. Construction of the 2 400 MW captive power plant started early this year and is expected to be completed in 2013. It is intended to power an aluminium smelter in Jizan Economic City. The city itself is 725 km south of Jeddah and will include residential, commercial and industrial zones. The economic city will be built in phases and is expected to be completed by the end of 2020. The Aluminum Corporation of China (Chalco) signed an agreement with Malaysia’s MMC Corporation and the local Saudi Binladen Group to develop a 1 million ton per year aluminum smelter in November 2007. MAIN CONTRACTOR: CPI Power Engineering

SAUDI ARABIA: Jubail IWPP The independent water and power plant in Jubail Industrial City will be made up of four blocks and based on combined cycle generation gas turbines. The extraction steam will supply the desalination plant, which will have 27 units employing multiple effect distillation technology. When operational, the plant will produce 2 745 MW of power and 800 000 m3 per day of desalinated water. These resources are destined for Jubail Industrial City and the Eastern Province of Saudi Arabia. The project is being developed with on a build, own, operate and transfer basis. The Seuz consortium was awarded the construction contract in December 2006. The consortium is a joint venture between Suez Energy International and Saudi Arabia’s Acwa Power Projects. MAIN CONTRACTOR: Suez Energy International MAIN CONTRACTOR: Acwa Power Projects, Saudi Arabia

BILAL QABALAN/AFP/GETTY IMAGES

JEC is on the drawing board with a power-hungry aluminium smelter at its heart.

www.arabianbusiness.com

Jubail’s oil-centred industrial base is hungry for more power.

August 2009

●

Utilities Middle East 23

WATER CONSERVATION

CRISTINA QUICLER/AFP/GETTY IMAGES

Waterâ&#x20AC;&#x2122;s power The close connection between water and power means technology choices need to be made carefully

Solar thermal power frequently

ater and energy are shackled together in the Middle East. Desalinated water from combined power generation and desalination facilities is the primary source of supply in GCC countries. Water is also a crucial component in energy production. These facts make successful water treatment and reuse an essential conservation measure. While sensible use of water in the region sounds like an easy step toward effective water conservation, the taking of it has proved elusive. Population growth, a broadening industrial base and urbanisation have all had an impact on consumption and waste. This has left a number of Gulf countries almost totally reliant on sea water desalination for fresh water supplies. Issues of scarcity have primarily been addressed through an

needs a desert location, as well as plenty of water.

24 Utilities Middle East

â&#x2014;?

August 2009

www.arabianbusiness.com

WATER CONSERVATION

increase in supply. Demand management, sectoral allocation and punitive pricing techniques could all help encourage more cautious consumption. These same market manipulation techniques could also accelerate the adoption of water treatment technologies. Market prospects for water treatment technologies remain strong, thanks to governments in GCC countries exhibiting strong political will to continue investment in important infrastructure projects. Environmental and health hazards related to the disposal of untreated effluent, marine pollution, and deteriorating ground water quality are some of the issues that need to be dealt with. Though these influences have been overshadowed by short-term economic concerns, analysts expect them to positively influence market dynamics from 2009 to 2013.

www.arabianbusiness.com

Individual actions make an incremental difference, but the most potential for change lies with the industrial sector. Here, the right technology selection now could have a massive impact on the future.

CARBON VERSUS WATER Carbon has been top of the green agenda for years and the need to reduce emissions has dominated public debate, especially around clean energy production. But the singular focus on carbon has distracted from energy’s growing impact on dwindling water sources, according to a report from Lux Research. The report, Global Energy: Unshackling Carbon from Water, observes that while new energy sources and extraction methods may reduce carbon intensity – kilograms of CO2 emitted per kilowatthour (kWh) of useful energy – they

often impose increased water usage. It begs the question: have we become too focused on CO2 at the expense of water conservation? “In short, yes, although water is stating to get on the radar,” said Michael LoCascio, a senior analyst at Lux Research. “A case in point is biofuels and solar thermal, which are popular because they are touted as potential solutions to carbon induced climate change. However, biofuels consume orders of magnitude more water per unit of energy produced than conventional hydrocarbons and puts great stress tight water supplies in most of the agricultural regions around the world. It’s just plain bad policy. “Solar thermal, like coal, natural gas, or nuclear, generates electricity by boiler water and as such requires condensers. However, unlike conventional systems that may be

located next to ample water supplies, solar thermal needs to be located in deserts, and because they are less efficient than natural gas it requires even more water. Fortunately the dry condenser technology is available, but at 10% to 15% relative efficiency penalty. “Without a clear perspective on the trade-offs between carbon, water and other factors, executives risk making short-sighted business decisions, particularly if they are expanding into global economies like India or China where water is a comparatively rare resource.” According to Lux’s report the energy horizon will continue to be dominated by coal and natural gas electricity sources in the near term. But the industry can expect to see more retrofits and upgrades of existing facilities, to make them more water and/or energy efficient. The

August 2009

●

Utilities Middle East 25

WATER CONSERVATION

ROSLAN RAHMAN/AFP/GETTY IMAGES

Water treatment technology presents a number of opportunities for regional businesses.

report also anticipates that alternative energy sources will grow rapidly, but remain limited overall. The slow roll-out of transcontinental highvoltage DC transmission lines is expected to hinder low-carbon, lowwater energy sources like solar and wind. Even advanced nuclear electricity, which may well be the most technologically secure answer, has water as its Achilles’ heel. “The original thesis of the report presumed that there was a fundamental tradeoff between CO2 footprint and water footprint, however after conducting the analysis that is not the case,” said LoCascio. “There is also no ﬁrm ﬁxed relationship between price and water intensity between technologies or within groups. Rather each technology has its own and somewhat independent relationship with cost, CO2 footprint and water footprint. “It’s basically a case-by-case basis, some technologies are awful on both a carbon and water footprint from but are cheap (coal), while others may be marginally better on carbon, but beyond awful for water and very expensive (biofuels). Renewables like wind and photovoltaic are good on water and carbon but are expensive and terribly unreliable.”

26 Utilities Middle East

●

August 2009

Technology-based solutions are available, or being developed. These include boiler water treatments, such as electrocoagulation, advanced ion exchange and membrane electrolysis. LoCascio points out that the best way to reduce water consumption for electricity generation is to increase efﬁciency, by using combined cycles or gasifying coal ﬁrst.

THE WATER OPPORTUNITY The water treatment opportunity in the region is huge. It has grown rapidly in recent years, which is both an indicator of its importance and the ready availability of the right technology. It is this technology that is opening the door to industrial-scale water conservation and reuse. The supply and maintenance of this technology

“Concerns about climate change and health hazards associated with disposal of untreated sewage are forces that can’t be neglected.” “Also, efficiency leaps are possible by increasing combustion temperatures allowed by new materials, coatings, and turbine cooling systems (the latter for natural gas), turbine and inlet cooling technologies and others,” he said. “There is also ample room for increasing the efficiency of nuclear plants by going to higher temperature designs such as fluidised bed reactors, or molten salt reactors.”

represents a signiﬁcant opportunity for businesses in the sector. According to research from consultancy Frost & Sullivan, the GCC market for water and wastewater treatment equipment earned revenues of US $1.26 billion in 2008. Wastewater applications generated revenues of US $952 million, cornering 75% of the market. Frost & Sullivan estimate that around 60% of the market is from the municipal sector, which includes the real

estate or commercial market as well. While the economic slowdown of recent months will have an impact on this growth, it is not expected to greatly curtail activity, as the market and reaches US $1.87 billion in value by 2013. “The way the water and wastewater sector will shape up over the coming years depends upon many factors, of which the economic slowdown is just one,” said Vivek Gautam, an analyst with Frost & Sullivan. “Concerns about climate change and health hazards associated with disposal of untreated sewage are forces that can’t be neglected. All of these are expected to push wastewater recycling and reuse in the region.” Gautam predicts that companies that invest in technology innovation and introduce cost effective products will have the advantage in market place. “In recent times market growth has been fuelled by investments across various sectors of the economy,” he said. “In the current scenario all market participants are facing an environment of subdued market demand. Decline in investments has adversely affected the demand for water and wastewater treatment equipment. The market today is a buyer’s market.” Gautam sees consumables, such as scale inhibitors and membrane antiscalants as important in a water treatment company’s portfolio, if they are to prosper during this period. For medium to large companies the key lies in increasing their recurring revenues by aggressively targeting operations and maintenance services or annual maintenance contracts. However, there are still notes of caution to be observed. “The market is fraught with challenges in spite of its immense opportunities,” says Gautam. “The complex business environment, slow decision making process, and customer preference for low cost solutions, regardless of performance, makes it difﬁcult to penetrate the market.” www.arabianbusiness.com

COUNTRY PROFILE

Help wanted Iraq needs time, investment and the help of neighbours if its water and electricity needs are to be met

t the end of 2008, Iraq’s daily power generation averaged around 6 000 megawatts (MW), whereas demand was typically more than 10 000 MW per day. As a result, Iraqi residents still suffer regular power outages. In July, iraqtomorrow.net reported that most areas of the country still receive power for just 1-4 hours per day. In the absence of availability from the grid, individuals running their www.arabianbusiness.com

own oil-powered generators have ﬁlled the gap, selling power to households at a large proﬁt. In an effort to bridge the gulf between demand and supply, the Iraqi Ministry of Electricity has signed US $3 billion worth of deals with GE Energy to buy power generation equipment and services. Under the agreement, concluded late last year, GE Energy is supplying heavy-duty frame 9E multi-fuel gas turbines capable of generating a

combined total of 7 000 MW of electricity. The government of Iraq plans to install the units at key sites around the country to provide needed support for the electricity grid. “Electricity is the backbone for quality of life and economic growth,” says John Krenicki, GE vice chairman and president and CEO of GE Energy. “We can bring the strength and dependability of GE’s advanced power generating technology and

services to Iraq’s mission to address long-term electricity demand.” Work to revive Iraq’s power stations, damaged through years of neglect and conﬂict, continues. In July this year, UNDP Iraq reported completion of repair work on units 1, 4 and 6 at Taji Gas Power Station in Baghdad Governorate. The work has added around 50 MW of electricity to the country’s national grid. At Mosul Gas Power Station, around 400 km north of August 2009

●

Utilities Middle East 29

COUNTRY PROFILE

Baghdad, the repair of units 2 and 4 has added 30 MW of new electricity to the national grid. In both projects, the UNDP supervised and monitored work from Amman on a daily basis using webcam and video conferencing technology. A number of site engineers were also sent to Japan for product training, helping to boost the skills base in the country. According to UNDP, Iraqi engineers are now able to operate and maintain the plants to international standards. Another project due for imminent completion is the rehabilitation of unit 1 of Musayab Thermal Power Station (TPS). The aim of the US $33 million project is to add another 100 MW per day to the national grid. UNDP has also recently announced success in its efforts to return the Karama Water Treatment Plant’s production capacity to 10 million gallons (MGD) per day. This effectively means restoring safe potable water supply to approximately one million people on the Karkh side of Baghdad, speciﬁcally those in Kadhimiya and a few districts in Rasafa. According to UNDP, water from the plant has improved by 75% and 300% in terms of the level of solid

content and chlorine content. Work was carried out on the water pumping station, chlorination facility, storage tanks, sand ﬁltration plant, treated water pumping station, electrical power supply system and several overhead cranes. As part of UNDP’s remit to transfer knowledge, staff from the water treatment plant, Baghdad Water Authority and the Mayoralty of Baghdad received the equivalent of 120 days of comprehensive training on operations and maintenance. Whatever improvements Iraq makes to its water collection, storage and distribution systems, supply of raw water is a growing problem. Iraq’s Ministry of Water Resources estimates that it needs around 50 billion cubic metres (m3) of water annually, of which 60% comes from the Tigris river and the rest from the Euphrates. Its problem is that Turkey, which sits upstream from Iraq, continues to siphon off ever greater amounts of Euphrates and Tigris water. The Turkish GAP, an ambitious US $32 billion program to build 22 dams and 19 hydroelectric power plants on the two rivers, will only increase the amount of water that disappears from the rivers before

they reach Iraq. In one scenario, Iraq’s annual water requirement will increase to 77 billion m3 by 2015, whereas availability of Tigris and Euphrates water will have declined to 43 billion m3 annually. Iraq has called for formal talks with Turkey to resolve the problem of how Tigris and Euphrates water is shared. In Iraq’s far South, Iran has been blamed for the disappearance of the country’s marshes and degradation of agricultural land by diverting rivers that ﬂow into the Shatt Al-Arab. Notwithstanding the water policies of its neighbours, there are many practical steps that Iraq can take to address the problem of water shortages. Its irrigation infrastructure is seen as antiquated and wasteful; little of its water is recycled and the dumping of material and liquid waste in its rivers persists. Its water capture and distribution systems need urgent modernisation and more dredging is required to prevent the building up of silt in water channels. Restoring Iraq’s electricity and water supply to levels approaching peak demand will require time, investment and smart negotiation.

IN NUMBERS: IRAQ GDP (purchasing power parity): $112.8 billion (2008 est.) $104.6 billion (2007) $103.1 billion (2006) GDP (official exchange rate): $93.8 billion (2008 est.) GDP - real growth rate: 9.8% (2008 est.) 1.5% (2007 est.) 6.2% (2006 est.) GDP - per capita (PPP): $4,000 (2008 est.) $3,800 (2007 est.) $3,800 (2006 est.) Budget: revenues: $42.4 billion expenditures: $49.9 billion (FY08 est.) Industries: petroleum, chemicals, textiles, leather, construction materials, food processing, fertilizer, metal fabrication/ processing Industrial production growth rate: 10.5% (2008 est.) Electricity - production: 36.92 billion kWh (2008 est.) Electricity - consumption: 39.88 billion kWh (2008 est.)

AZHAR SHALLAL/AFP/GETTY IMAGES

Electricity - imports: 2.95 billion kWh (2008 est.) Natural gas - production: 15.66 billion m3 (2008 est.) Natural gas - consumption: 9.454 billion m3 note: 1.48 billion m3 were flared (2008 est.)

The Euphrates runs the length of the nation is one of two main water life lines in Iraq.

30 Utilities Middle East

●

August 2009

Natural gas - proved reserves: 3.17 trillion m3 (1 January 2008 est.)

www.arabianbusiness.com

PROJECTS

UTILITIES PROJECT TRACKER Information is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.com MIDDLE EAST Project Title

Client

Consultant

Main Contractor

Reinforcement of Six 132-kV Substations in Jizan

Saudi Electricity Company (SEC)

In House

Iscosa Industries & Maintenance, LTD.

Shouaiba-2 Substation - Namera North Overhead Transmission Line

Saudi Electricity Company (SEC)

Tabuk Power Plant

Saudi Electricity Company

Desalination Plant in Jeddah - Phase 3

Value / Value Range (US$. Mn)

Project Status

Project Type

project under construction

Others

Not Appointed

106

EPC Bid

Power Transmission

National Engineering Services Pakistan (Nespak)

National Contracting Company

114

project under construction

Power Plant

Saline Water Conversion Corporation (SWCC)

Kuljian Engineering Corporation

Doosan Heavy Industries & Const. Company / Saudi Berkefeld Filter (Witco)

245

project under construction

Desalination Plant

Shouaiba IWPP - Phase 3

Saline Water Conversion Corporation (SWCC)

Fichtner

Siemens/Doosan

2,500

project under construction

Power & Desal Plant

Khurais Field DevelopmentQurayyah Seawater Treatment Plant

Saudi Aramco

Jacobs Eng./SNC Lavalin/SaudConsult

Snamprogetti

2,000

project under c onstruction

Water Treatment

10J Substation & 101 Satellite Substation in Yanbu

Royal Commission for Jubail and Yanbu (RCJY)

Not Appointed

150

EPC Bid

Substation

33/13.8-kV 7921-Substation in Hail

Saudi Electricity Company (SEC)

Mohammed Al-Ojaimi Contracting Est.

project under construction

Substation

Yanbu IWPP

The Power & Water Utilities Company for Jubail & Yanbu (Marafiq)

Not Appointed

4000

EPC Bid

Power and Desalination Plant

Rabigh IWSPP

Petro-Rabigh

Mitsubishi Heavy Industries

500

project under construction

Power & Desal Plant

110/13.8-kV Substation in Al Misfalah - 3

Saudi Electricity Company (SEC)

Saudi Services for Electro Mechanic Works Co. (SSEM)

project under construction

Substation

380-kV Substation at Jubail 2

Saudi Electricity Company (SEC)

Cogelex Alstom S.A (Areva T&D)

148

project under construction

Substation

Inter - Jubail Overhead Line

Saudi Electricity Company (SEC)

Saudi Services for Electro Mechanic Works Co. (SSEM)

100

project under construction

Power Transmission

Power and Water Plant in Ras Al Zour

Saudi Arabian Mining Company (Maaden) / Rio Tinto Alcan

Not Appointed

2500

project under design

Power & Desal Plant

Yanbu-2 Power Plant

Saudi Electricity Company

Not Appointed

1,500

project in its concept stage

Power Plant

Shouaiba Power Plant Expansion - Phase 2, Stage 2

Saudi Electricity Company

Not Appointed

900

project under study

Power Plant

Ras Al-Zour IWPP

Saline Water Conversion Corporation (SWCC)

Fichtner

Not Appointed

3,000

EPC Bid

Power & Desal Plant

Tabouk Power Plant Expansion

Ministry of Water and Electricity

National Contracting Company Limited (NCC)

project under construction

Power Plant

Captive Power Plant in JEC

Saudi Binladin Group / CHALCO / MMC Corporation Berhad

CPI Power Engineer

2000

project under construction

Power Plant

480 MW Expansion of Jeddah PP3 - Stage II

Saudi Electricity Company (SEC)

Not Appointed

250

project under study

Power Plant

PP11 Power Plant in Riyadh

Saudi Electricity Company (SEC)

Not Appointed

2133

EPC Bid

Power Plant

Rabigh IPP - Jeddah North Subsation OHTL

Saudi Electricity Company

Middle East Engineering and Development Company Ltd (MEEDCO)

project under c onstruction

Power Transmission

1200 MW Thermo-electric Power Plant in Rabigh

Saudi Electricity Company (SEC)

Not Appointed

2000

project in its concept stage

Power Plant

SAUDI ARABIA

Mohammed A.Turki Mott MacDonald

Saudi Electricity Company (SEC)

Not Appointed

UAE Desalination Plant in Jafza

Jafza/Palm Water

GHD

Not Appointed

250

EPC Bid

Desalination Plant

Hassyan Complex - Station P - Phase 2(P2)

Dubai Electricity and Water Authority (DEWA)

Lahmeyer International, Abu Dhabi

Not Appointed

3000

EPC Bid

Power and Desalination Plant

32 Utilities Middle East

â&#x2014;?

August 2009

www.arabianbusiness.com

PROJECTS

Project Title

Client

Consultant

Main Contractor

Value / Value Range (US$. Mn)

Fujairah 2 (F2) IWPP

ADWEA/ Marubeni Corporation/ International Power

Fichtner

Alstom Power / Sidem

14 New Substations - Dubai Investment Park

Dubai Investments Park / DEWA

Six 33/11kV Substations in Al Ain

Abu Dhabi Water and Electricity Authority (ADWEA)

Coal-Fired Power Plant in Abu Dhabi

Project Status

Project Type

3,000

project under construction

Power & Desal Plant

Siemens, Dubai

200

project under construction

Substation

Mott MacDonald, Abu Dhabi

Larsen & Toubro, Abu Dhabi

project under construction

Substation

Taqa (Abu Dhabi National Energy Company)

Not Appointed

1000

project under study

Power Plant

Power and Desalination ComplexM Station

DEWA

Fichtner

Doosan / Fisia Italimplanti

2,693

project under construction

Power & Desal Plant

Nuclear Power Plant in Abu Dhabi

Abu Dhabi Water and Electricity Authority / Emirates Nuclear Energy Corporation

Not Appointed

60000

EPC Bid

Power and Desalination Plant

Installation of 11kV Cables in Dubai

Dubai Electricity and Water Authority (DEWA)

Not Appointed

EPC Bid

Power Transmission

Five 132/11 kV & One 132/33 kV Substations in Dubai

Dubai Electricity and Water Authority (DEWA)

Emirates Trading Agency (ETA), Dubai

225

project under construction

Substation

Not Appointed

3,700

project under design

Power & Desal Plant

Al Ahlia Switchgear Company

project under construction

Substation

Mitsui Company

1,300

project under construction

Power & Desal Plant

KUWAIT Al Zour Power Plant Expansion

MEW

Parsons Brinckerhoff

Sabriya ‘A’ Substation

KOC

Shuaiba Power & Desalination Plant

MEW

Shuwaikh Desalination Plant

MEW

Doosan Heavy Industries & Construction Kuwait

320

project under construction

Desalination Plant

Five 132/11 kV Substations at Jaber Al-Ahmed

MEW

Al Ahlia Switchgear Company

project under construction

Substation

Parsons Brinckerhoff

QATAR Ras Laffan C Independent Water & Power Project

Qatar General Electricity & Water Corporation

Kema

Mitsui & Company

3,900

project under construction

Power & Desal Plant

Captive Power Plant at Mesaieed

Qatalum

Mott MacDonald

GE / Doosan Heavy Industries

1,000

project under construction

Power Plant

Mesaieed A - Power Project in MIC

QEWC/QP/Marubeni

Fichtner

Iberinco

2,000

project under construction

Power Plant

VA Tech Wabag

project under construction

Desalination Plant

OMAN Desalination Plant in the Duqm Area

Rural Areas Electricity Company

Salalah IWPP

Oman Power & Water Procurement Company

Fichtner

Not Appointed

400

EPC Bid

Power & Desal Plant

Rusayl and Barka-Phase 2 Schemes

Suez Tractebel / Mubadala Development Company / Oman Power and Water Procurement Co.

Black & Veatch Consulting

Doosan Heavy Industries

800

project under construction

Power & Desal Plant

IWPP in Addur

Min. of Finance/ Min. of Electricity & Water

Mott MacDonald

Hyundai Heavy Industries / Degremont

4,000

project under construction

Power & Desal Plant

Ten 220kV Substations

Ministry of Electricity & Water, Bahrain

Electricity Supply Board Int. - Ireland

Electricity Supply Board International- Ireland (ESBI)

105

project under construction

Substation

BAHRAIN

www.arabianbusiness.com

August 2009

●

Utilities Middle East 33

TENDERS

Tender activity To add a tender to our listing, email details to lutfi.qaraman@itp.com Visit constructionweekonline.com for the latest tender information

UME provides free access to the latest publicly available tender listings from across GCC countries. The tenders included are aggregated from a wide variety of public and private sector sources from across the region. Where possible, tenders include the issuer, name and category of the tender; opening and closing dates; narratives; fees, bonds and contacts

2 X 20 MVA SUBSTATION Issuer: Majan Electricity Company Tender o: 213/2009 Description: New 2 x 20 MVA substation at Khabourah Closes: 10 August Fees: OMR285,000 Closes: www.tenderboard.gov.om WATER TREATMENT AND DESALINATION PACKAGE Issuer: East Delta Electricity Production Company Description: Water treatment and desalination package pertaining to Sukhna 2 x 650MW steam fired power station project. Closes: 17 August Fees: EGP8392 Bond: EGP6.7 million Contact: Shebin El Kom Street, Ismailiya, Egypt WATER INTAKE CHANNEL Issuer: Dubai Electricity and Water Authority Tender No: CNE/0114/2008(R) Description: The scope of work includes the construction of a water intake channel (onshore and offshore sections). Closes: 13 September Fees: AED5000 Contact: Dubai Electricity and Water Authority, PO Box 564, Dubai, UAE

34 Utilities Middle East

â&#x2014;?

August 2009

TAIF - AL-BAHA WATER TRANSMISSION SYSTEM Issuer: Saline Water Conversion Corporation Tender no: 2/2009 Title: Taif - Al-Baha Water Transmission System Description: The scope of work includes Taif - Al-Baha water transmission system in Saudi Arabia. Bond: N/A Tender fee: 100000.00 SAR Closes: Aug 17, 2009 Contact: http://www.swcc.gov.sa SUPPLY & INSTALLATION OF 33-KV INDOOR TYPE SWITCHGEAR IN OMAN Issuer: Muscat Electricity Distribution Co. (SAOC) Tender no: 221/2009 Title: Supply & Installation of 33-kV Indoor Type Switchgear in Oman Description: The scope of work includes supply & installation of 33-kV indoor type switchgear at old airport primary substation in Ruwi. Bond: N/A Tender fee: 200.00 SAR Closes: Aug 10, 2009 Contact: http://www.tenderboard.gov.om SUPPLY OF PIPELINE FOR TAIF - AL-BAHA WATER TRANSMISSION SYSTEM Issuer: Saline Water Conversion Corporation Tender no: 3/2009

Title: Supply of Pipeline for Taif - AL-Baha Water Transmission System Description: The scope of work includes supply of pipeline for Taif - AL-Baha water transmission system. Bond: N/A Tender fee: 100000.00 SAR Closes: Aug 16, 2009 Contact: http://www.swcc.gov.sa REPLACEMENT OF SWITCHGEAR IN KUWAIT Issuer: Central Tenders Committee Tender no: 3082909 Title: Replacement of Switchgear in Kuwait Description: The scope of work includes replacement of 8 switchgears in Ahmad Al-Jaber Air Force, Kuwait. Bond: Applicable Tender fee: 50.00 KWD Closes: Aug 18, 2009 Contact: Central Tenders Committee - Ministry of Defence HASSYAN POWER & DESALINATION STATION (STATION P - PHASE 2) IN DUBAI Issuer: Dubai Electricity & Water Authority Tender no: CNE/606/2007(R) Title: Hassyan Power & Desalination Station (Station P - Phase 2) in Dubai Description: The scope of work includes construction of Hassyan Power & Desalination Station P - Phase

www.arabianbusiness.com

TENDERS

2 with capacity of 1500 MW and 100 - 120 Million Gallons per Day (MIGD) water at Hassyan, Dubai. The work is divided into two packages. Power Plant Package (P) and Desalination Package (D). The station is planned to be commissioned in stages during the years 2011 & 2012. Bond: N/A Tender fee: 5000.00 AED Closes: Sep 8, 2009 Contact: Head Office of Dubai Electricity & Water Authority AL-ZOUR DESALINATION PLANT - PHASE 2 Issuer: Ministry of Electricity and Water Tender no: MEW/39/2008/2009 Title: Al-Zour Desalination Plant - Phase 2 Description: The scope of work includes design, construction of Al-Zour desalination plant, phase 2. Bond: Applicable Tender fee: 3000.00 KWD Closes: Sep 8, 2009 Contact: http://www.ctc.gov.kw HASSYAN POWER & DESALINATION STATION - WATER INTAKE AND OUTFALL SYSTEM PACKAGE Issuer: Dubai Electricity & Water Authority Tender no: CNE/0114/2008(R) Title: Hassyan Power & Desalination Station - Water Intake and Outfall System Package Description: The scope of work includes construction of water intake channel (onshore and offshore sections), outfall System comprising and outfall chamber means of transporting the discharge offshore, boat house anf boat lifting facilities, and ancillary works, including roads and lighting. Bond: N/A Tender fee: 5000.00 AED Closes: Sep 13, 2009 Contact: The Chairman, Board of Directors Dubai Electricity & Water Authority

www.arabianbusiness.com

CONSTRUCTION OF OHTL IN SEVERAL AREAS OF KUWAIT Issuer: Central Tender Committee Tender no: MEW/34/2009/2010 Title: Construction of OHTL in Several Areas of Kuwait Description: The scope of work includes construction of 32, 132, and 300-kV Over-head transmission line. Bond: Applicable Tender fee: 2000.00 KWD Closes: Sep 15, 2009 Contact: Central Tender Committee - Ministry of Electricity & Water

KEY CONTRACT

SUBSTATION 10J AND SATELLITE SUBSTATION 101 The Royal Commission for Jubail & Yanbu (RCJY) has a substation tender closing on 16 August. Tender number PIC B-1191A is for substation 10J and satellite substation 101. The scope of work includes all engineering, procurement and construction activities required to provide the 380/115/34.5 kV substation 10J, as well as the 380 kV transmission circuits on lattice steel towers, all in Yanbu Industrial City. The contract also covers a 34.5/13.8 kV satellite substation. There’s a tender fee of 33,500 SAR. Contact: Contracts Section Directorate General of the Royal Commission in Jubail, Procurement Department PO Box 10001 Jubail Industrial City 31961, Phone: 009663-3414127/4163,

INSTALLATION OF 2 AIR COMPRESSORS IN KUWAIT Issuer: Central Tenders Committee Tender no: MEW/37/2009/2010 Title: Installation of 2 Air Compressors in Kuwait Description: The scope of work includes supply, installation, commission and testing of two air compressors used by Al-Zour Southern Plant in Kuwait. Bond: Applicable Tender fee: 100.00 KWD Closes: Sep 29, 2009 Contact: Central Tenders Committee - Ministry of Electricity & Water. REPLACEMENT OF WATER PIPELINE IN KUWAIT Issuer: Central Tenders Committee Tender no: MEW/41/2009/2010 Title: Replacement of Water Pipeline in Kuwait Description: The scope of work includes replacement of No.3 water pipeline that supply the turbines in Doha power plant. Bond: Applicable Tender fee: 80.00 KWD Closes: Sep 8, 2009 Contact: Central Tenders Committee - Ministry of Electricity & Water ABDULLAH PORT - AL FUNAITEES EAST POTABLE WATER PIPELINES Issuer: Central Tenders Committee Tender no: MEW/37/2008/2009 Title: Abdullah Port - Al Funaitees East Potable Water Pipelines Description: The scope of work includes construction of five 1600MM-potable water pipelines from Abdullah Port to Al Funaitees East. Bond: Applicable Tender fee: 4000.00 KWD Closes: Sep 29, 2009 Contact: www.ctc.gov.kw Ministry of Electricity and Water

August 2009

●

Utilities Middle East 35

EVENTS

October 28

MEP Conference Kuwait www.constructionweekonline.com With the rise of super projects, Kuwait MEP contractors need to offer value to their customers as well as being efficient, sustainable and timely. This conference aims to shine the spot-light on Kuwait and discuss issues such as the challenges involved in engaging with Kuwait developers, what projects and opportunities exist, what technologies are needed and the long-term plans for the country.

November 3

Construction Week Conference Dubai, UAE www.constructionweekonline.com The Construction Week Conference will give participants the opportunity to discuss the lessons they’ve learned from one of the toughest year’s the region’s industry has faced. People will be able to hear about the ingenuity demonstrated in the face of a year has been starkly different from anything seen before. The conference will look at how the best construction contractors rose to the challenges and took advantage of the opportunities in power and water infrastructure.

December 8

Building Sustainability Abu Dhabi, UAE www.constructionweekonline.com Downturns are when innovations can take off and there is a thirst for sustainable ideas, including those that provide energy. The Building Sustainability conference will be looking at the how’s and why’s of going green, while discussing practical examples of initiatives that have had a positive impact.

EVENT HORIZON August 17-19 Smart Grid Implementation Summit Washington DC, USA www.iqpc.com

October 4-7 Middle East Nuclear Energy Summit Dubai, UAE www.iqpc.com

October 9 QWETEX Doha, Qatar www.eventseye.com

October 11-13 Africa Arab Business Investment Forum Dubai, UAE www.africa-arab.com

November 4 Construction Week Awards Dubai, UAE www.constructionweekonline.com

November 23-26 The Big 5 Dubai, UAE www.thebig5exhibition.com

October Construction Week Iraq Briefing Baghdad, Iraq www.constructionweekonline.com

October 7-9 WaterSmart Innovations Las Vegas, USA watersmartinnovations.com

October 11-13 Ecobuild Emirates Dubai, UAE www.ecobuildemirates.com

October 18-21 Security for Energy Infrastructure Summit Abu Dhabi, UAE www.iqpc.com

November 11-12 Construction Week India Conference New Delhi, India www.constructionweekonline.com

December 9 MEP Awards Dubai, UAE www.constructionweekonline.com

36 Utilities Middle East

●

August 2009

www.arabianbusiness.com

QUICK Q&A

PEOPLE METER

The last mile Varis Energy managing director David Hogan talks to UME about how wireless metering can save cash and capacity What’s your company’s background? Varis Energy’s partners have a history of involvement in substation automation. The idea came when we ﬁrst saw the change in mindset of utilities and how they were implementing the smart grid – taking the demand response situation from a commercial setting and move it into a residential setting – in order to facilitate load curtailment.

management solutions. Our product offerings go beyond traditional energy management where designed to be implemented as part of utility-based variable tariff structures. This load shedding, demand response capability provides signiﬁcant savings for the utility right down to the end user, with the added beneﬁts of course to the environment, due to reduced consumption. Dubai can expect to see

“This load shedding, demand response capability provides significant savings for the utility right down to the end user, with the added benefits of course to the environment, due to reduced consumption.”

That’s where we came across Zigbee. It’s touted as a ‘last mile’ communications link between meters and smart devices in the home. So, what do you do? Through our partners RotaryHumm Dubai we offer highly ﬂexible, easy to retro-ﬁt smart energy

40 Utilities Middle East

●

August 2009

variable tariff structures coming very soon with the initial roll out of smart meters already taking place. What is signiﬁcant about Zigbee? Our products communications are based on Zigbee wireless. This allowed us to retroﬁt the Environment Protection Agency building

in two days. To wire such a building would normally take two weeks. The existing market is enormous compared to the new, it’s how to make a difference for utilities, who want to affect existing companies, because that’s where the bulk of their demand is. Can you describe an application has your wireless product/ser vice been used for? Our solution has been deployed in hotels, university’s, commercial buildings, and retail stores. Our largest single installation is in the 5 000 room-plus Palazzo Hotel in Las Vegas. The system offers full integration and control of hotel reservations, room management, HVAC, lighting and access control.

ment step for your ser vice or product? We will keep expanding our range of products to include control of standard consumer electronics devices. RF4CE group is going to see Zigbee as becoming the new standard for communications in consumer devices like TV’s, fridges, washing machines etc. It has already been shown in concept that a washing machine doesn’t start its wash cycle until the utility meter tells the machine that it is now the economy price tariff.

What beneﬁts did it offer your client and how are these realised? During our case studies we have found that clients who purchase our solution enjoy savings of 30-40% HVAC depending on site usage. We also further help our clients by reducing the capital cost of the system by entering into a revenue sharing agreement based on energy savings over ﬁve years. What do you see as the next developwww.arabianbusiness.com

Celebrating 5 years of excellence HIGH PROFILE SPEAKERS INCLUDE: H.E. Abdullah Al-Hussayen, Minister of Water & Electricity H.R.H. Prince Khalid Bin Faisal Bin Abdulaziz, Governor of the Makkah Region Fred Pearce, Author and Journalist Jamal Saghir, Director, Energy, Transport and Water, World Bank Mansour Al-Mayman, Director, Saudi General Investment Fund Steve Bolze, President and CEO, Power & Water, GE Energy Ahmad A Al-Saâ&#x20AC;&#x2122;adi, Vice President, Pipelines, Distribution and Terminals, Saudi Aramco Mohamad Al-Debaib, General Manager, Saudi Industrial Development Fund Dr Mansour Durrani, Senior Coporate Banker, Structured Finance, National Commercial Bank Rayyan Nagadi, Associate Director, Project & Export Finance, HSBC Saudi Arabia Limited

www.ksawpf.com For sponsorship opportunities please call Peter Braham on +44 20 7978 0087 or email pbraham@thecwcgroup.com To exhibit call Shunker Goel on +44 20 7978 0080 or email sgoel@thecwcgroup.com

PRINCIPAL SPONSOR

FORUM SPONSORS

SUPPORTED BY

GE Energy

Get Expert Insight. Watch your plant assets like a hawk—gain insight and act. By combining the Bently Nevada Essential Insight.mesh™ wireless platform with our machinery knowledge and trusted support, you can now reduce your operating and capital expenses. Improve maintenance and productivity throughout your plant with Essential Insight.mesh. Our industrial grade wireless mesh solution builds on the Bently Nevada heritage and integrates our world renowned diagnostics expertise and unmatched technical services. Finally, a wireless condition monitoring solution that delivers on your expectations. For more information, visit www.ge-energy.com/bentlywireless or contact us at +966 3 801 0241.

General Electric Saudi Arabia, Petroleum Center – Building B, P.O. Box 32168, Al-Khobar 31952, Kingdom of Saudi Arabia