Utilities Middle East - Sept 2010

Middle East

ESSENTIAL INSIGHTS FOR MIDDLE EAST WATER, GAS AND ELECTRICITY PROFESSIONALS

An ITP Business PublicationAn ITP Business Publication

BUSHEHR REACTOR LAUNCHES IRAN INTO THE NUCLEAR GAMEAnalysis: The regime’s ambitious enrichment plans have provoked stern suspicion

September 2010 • Vol 4. Issue 9

GCC POWER PLAY

HARBOURING AMBITIONS

BAHRAIN SNAPSHOT

WATER WAYS

Should regional power providers be chasing peak loads?

Khalifa Port Industrial Zone uncovered

Island Kingdom’s utilities under the microscope

Transmission systems in the Middle East

Power plan

t desi

gn is help

ed by

increasi

ngly sophisti

cated so

ftware

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CONTENTS

www.utilities-me.com September 2010 ● Utilities Middle East 1

2 COMMENTWhatever the solution to power shortages, it comes at a price.

4 REGIONAL UPDATEA round-up of some of the biggest headlines in the region.

10 WEB PAGE Highlights of the rich content at www.utilities-me.com.

12 NEWS ANALYSIS Florian Neuhof examines Iran’s fledgling nuclear power project.

17 SECTOR ANALYSISHow will GCC governments deal with rising peak power demand?

How to position your firm in the power generation market.

23 WATER TRANSMISSIONWater transmission systems in the region are expanding rapidly.

26 PLANT DESIGNDesign software makes power-plants cheaper to built and run.

31 ELECTRICAL TESTING Testing and diagnostics of T&D equipment is no longer neglected.

34 HARBOUR VISIONSSITE VISIT: Khalifa Port Industrial Zone’s utilities infrastructure.

39 PEOPLE METERPeter Neuschaefer from Waagner Biro Gulf talks sustainability.

42 PROJECTS & TENDERSThe latest projects and tenders.

46 DATES FOR YOUR DIARYConference & Exhibition digest.

47 BAHRAIN SNAPSHOTWhats going on in Bahrain’s power and water sector?

September 2010Vol 4. Issue 9

1234

Iran is not about to abandon its nuclear ambitions.

31

The Khalifa Port and Industrial Zone underlines Abu Dhabi’s grand economic ambitions.

Electrical testing and diagnostics in the Middle East. 26Plant design requires

sophisticated IT.

17Power generation in

the GCC is chasing peak loads.

COMMENT

2 Utilities Middle East ● September 2010 www.utilities-me.com

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So nuclear power has come to the region at last. Once the fuelling of the Bushehr reac-tor is complete this month, the 1,000MW

plant is ready to contribute to Iran’s electricity grid. While experts say that there is little danger that

the reactor will serve the hardline regime in their (assumed) quest for a nuclear arsenal, neighbour-ing countries and Western powers are still con-cerned, given Iran’s history of covert operations to acquire weapons components. Fuelling this concern is Iran’s refusal to halt its uranium enrich-ment programme. The mullahs claim that the pro-gramme is for a peaceful purpose, and point to their ambitious plans: 20,000MW to be generated from nuclear power by 2025.

Ambition is a good thing, but not when it bor-ders on megalomania. Having maneuvered itself into diplomatic isolation, Iran is struggling both for funds and technical expertise. A second Bushehr is unlikely in the coming decades.

With its insistence on the enrichment pro-gramme, the regime opens itself up for the inevi-table question: Why enrich, if not for military pur-poses? “They haven’t been able to answer that question favourably,” comments Sam Ciszuk from IHS Global Insight.

This sort of intent is not expected from other Middle Eastern countries, and Saudi Arabia and Kuwait are some of those exploring the option of following Abu Dhabi’s example of building nuclear reactors sans the international fallout.

But even if pursued with undoubtedly clean intentions, nuclear is no easy answer to the power

shortage in the region. For one thing, a surge of demand would lead to

a shortage of skilled manpower, a scarce resource in the region at any rate. On the back of demand for nuclear power elsewhere in the world, con-struction cost would rise. “The market has turned from a buyer’s into a seller’s market,” says Holger Rogner, section head at the UN’s International Atomic Energy Agency.

While nuclear might still be a worthwhile option to pursue, decision makers would do well to think for alternative ways to solve their power prob-lems. Power outages, the most noticeable symp-tom of a stretched supply, are the result of gener-ation capacity being outstripped by peak loads. In the summer months, utilities fi nd it hard to cope with rising demand, especially in the daytime heat.

Are we just chasing peak loads, asks Abhay Bhargava from consultancy Frost & Sullivan. Would it not be wiser to entice industry, and house-holds, to consume less during peak hours? The innovative use of tariffs could so reduce the need to build ever more generation capacity.

This would still entail investment, as the elec-tricity grid would have to be upgraded, and smart metering would become essential. But it would be a more energy effi cient solution, and pave the way for the mass use of renewables.

One thing is for sure: Whatever the solution, there will be a price for it.

Florian Neuhof, Editor Email: fl [email protected]

The price of powerTackling the region’s power shortages comes at a cost

Middle East

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Iran is paying a heavy political and economic price for its fi rst nuclear power plant.

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REGIONAL UPDATE

4 Utilities Middle East ● September 2010 www.arabianbusiness.com

Bidders slash price for RabighDoosan’s proposal remains cheapest as Alstom and Hyundai also lower offersSouth Korea’s Doosan Heavy Industries & Construction has cut by US$559.9 million a pro-posal it made for the construction of a 2,400MW power plant in Saudi Arabia, an industry source told the Reuters newswire.

The plant, in Rabigh on the western coast of Saudi Arabia, would have capacity of 2,400 to 2,800MW, some 12-14 percent of the 20,000MW the SEC plans to add through 2018, at an estimated total cost of $80 billion.

Doosan remains the lowest bidder to build the plant for state controlled Saudi Electricity Co. Doosan revised its bid to $3.38 bil-lion from $3.94 billion. The other two bidders, Hyundai Heavy Industries (HHI) and France’s Alstom have also revised their bids to $3.70 billion and $3.83 bil-lion respectively, the source said.

A Doosan offi cial, who declined to be named, confi rmed his com-pany was the lowest bidder for the project. He added a decision on the project was likely to be taken late in August or early September. Hyundai Heavy confi rmed it made

KAFD district cooling contract goes to Tabreed and SNC Lavalin

DEWA increases power and water production in the fi rst half of 2010

A consortium comprising of Saudi Tabreed and SNC Lavalin are to supply district cooling to the offi ce towers in the King Abdullah Financial District in Saudi Arabia’s capital Riyadh..

With a total of 100,000 tonnes of refrigeration, it will be the larg-est of district cooling project in the Kingdom to date. The consortium will design and build the district cooling facilities, as well as oper-ate the system for ten years.

The Dubai Electricty and Water Authority (Dewa) added two gas turbines and two desalination units to the Station M power and water plant during the fi rst half of the year, according to Dewa CEO Saeed Mohammed Al Tayer.

The gas turbines raise the capac-ity of the plant by 400MW and 35 million gallons per day. An auxiliary boiler has also been added. Dewa will incease the capacity of the plant during the second half of the year by

The project will be imple-mented in two phases. The fi rst 50,000 tonnes be commissioned in the fi rst quarter in 2011, while the second phase will be commis-sioned in the fi rst quarter in 2012.

The contract has been awarded by the Rayadah investment com-pany” (RIC), the developer of King Abdullah Financial District. Saudi Tabreed is a closed joint stock company majority-owned by ACWA Holdings and Tabreed.

the same amount by adding a fur-ther two gas turbines and a pair of desalination units, as well as four auxiliary boilers, said Al Tayer.

“Dewa’s projects are going ahead according to a fl exible strategic plan taking into consideration the differ-ent factors that may infl uence the demand on its services, especially the peak load of electricity which increased this year to reach 9.6 per-cent compared with that peak load recorded in 2009,” he added.

a revised offer but declined to confi rm the prices.

A spokesman for Alstom said no decision had been made yet

and that the company expected a decision to be taken in the coming weeks. He declined to comment on the level of Alstom’s offer.

Bidding for the plant had closed on December 15.

The bids were below SEC’s cost projections. An SEC executive had estimated the cost of the plant to be at around $4 billion, down from an initial estimate of around $5 billion.

In April this year, Saudi Electric-ity secured a $4 billion soft loan from the government.

The bulk of the loan will fi nance the construction of the plant in Rabigh where the giant King Abdullah Economic City is under construction.

The Rabigh power plant is expected to be completed in the summer of 2014.

Increase in power consumption in 2009.

20,000MW

The SEC is benefi tting from

revised bids for Rabigh.

REGIONAL UPDATE

www.arabianbusiness.com September 2010 ● Utilities Middle East 5

Tabreed’s Q2 earnings growth fails to impress Recapitalisation and share dilution undermine confidence

The share price of the National Central Cooling Company (Tabreed) failed to respond to the news of strong increases in Q2 revenue and net income, as a recapitalisation scheme and the prospect of share dilution damp-ened investor appetite.

Net income of the Abu Dhabi-based district cooling company rose to AED40.3 million, more than double the fi gure posted a year earlier. Revenue increased by 35 percent to AED247.7 million.

Tabreed attributed the strong performance to a growth in the core business of providing chilled water, resulting from more cool-ing plants coming online and an increased customer base.

In the second quarter, Tabreed added four plants to its fl eet, bring-ing the total to 44, 10 more than a year earlier. Installed cooling capacity rose to 449,625 (gross) TR, from 352,100 TR a year ago.

“Our strategy has been to focus on the core business of chilled water, and these robust fi rst half results refl ect growth in the Com-pany’s chilled water business and improved operational effi cien-cies,” said Sujit Parhar, Tabreed’s CEO.But profi ts were also boosted by the revaluation of a convertible sukuk, which added a non-cash, non-operational gains of AED7.1 million to the profi t margin. With-out these gains, net profi ts for fi rst six months of 2010 would have been up a mere 3 percent year on year, not the current 83 percent.

SHARE REDUCTIONAfter having been hit by impair-

95 PERCENT OF NETWORKS LINKED TO SAUDI GRIDThe Saudi Electric Company has completed linking transmission lines in most of the Kingdom, Minister of Water and Electricity Abdullah Abdul Rahman Al-Hussayen said in a statement to the Saudi Press Agency on Friday. “About 95 percent of electricity supply networks have been connected to a single national grid,” said the minister.

UAE TO BECOME SOLAR POLYSILICON PRODUCERMBM Holdings, a Dubai-based investment fi rm, has announced it will build a US$400 million plant producing solar-grade polysilicon in the UAE.The plant will have a total capacity of 2,500 tonnes per annum of high-quality product and is expected to start production in early 2012. Polysilicon is the material used in solar panels.MBM has formed MBM Solar Holdings for the project, which will be developed jointly with ERC Private Limited Singapore.

JAPAN HELPS TUNESIA ON ROAD TO SUSTAINABILITYJapan and Tunisia have signed a memorandum of understanding (MoU) aimed at boosting co-operation in the fi eld of renewable energy, reported the Ansamed website. The accord is expected to be implemented through a joint energy project in Borj Cedria and include the creation of an eco-village and an international centre promoting renewable energy.

HIGHLIGHTS

ment charges in Q1, Tabreed is currently undergoing a restruc-turing programme. The company had to write down assets to the tune of AED1.16 billion, and had to take up a $354 million bailout loan from Abu Dhabi’s state investment vehicle Mubadala. Tabreed recently announced that the board approved a reduc-tion of outstanding shares that would boost the share price above 1 dirham on the Dubai Financial Exchange, enabling it to carry out a rights issue in future. Under this plan, capital can be reduced by 80 percent, which amounts to AED790 million, or 970 million shares.

This 5:1 conversion would leave existing shareholder own-ership proportions intact, and lead to a share price of around AED1.90, estimates the brokerage EFG Hermes.

“Completing our recapitalisa-tion program will give Tabreed the right balance sheet for growth, and today’s announcement towards the capital reduction is an important step in this process,” said Khaled Al Qubaisi, managing director at Tabreed.

MUTED RESPONSEYet the stock market remained largely unimpressed by the growth fi gures.

Shares on the Dubai Financial Exchange, closed at AED0.357 on August 10, the day the earnings were announced, only marginally higher than a day earlier, and well below the high of AED1.16 the shares were traded at in mid-Octo-ber 2009.

“Given the severity of the impairment charges that the com-pany announced at the begin-ning of the year and the subse-quent recapitalisation proposed by the company, we believe that there is signifi cant downside risk to the equity value of Tabreed,” wrote Abid Riaz, director at EFG Hermes, in a research note.

The loan provided by Mubadala also poses risk for shareholder value, he said.

“With Mubadala, the compa-ny’s largest shareholder, provid-ing short-term funding of AED1.3 billion in exchange for long-term capital, we believe existing share-holders will be diluted further. In our mind, questions also remain as to the state of the business post the proposed recapitalisation, and therefore we remain sellers of the stock.”

Tabreed currently owns and operates district cooling plants via wholly-owned joint-ventures and subsidiaries Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.

Tabreed’s installed cooling capacity by Q2 2010

449,625

REGIONAL UPDATE


Ras Girtas starts operations Phase I of largest Qatari independent power and water project complete.

The Ras Girtas IWPP will have an initial generation capacity of 1,833MW, rising to 2,730MW by 2011.

The fi rst phase of the multi-billion dollar Ras Girtas power and water plant in Ras Laffan Industrial City in Qatar has been completed, reports the Dow Jones newswire.

The initial phase, Project C, has the capacity to generate 1,833MW of power. Once fully operational, the project will have a total capacity of 2,730 MW.

With the completion of the fi rst phase, a total of eight gas turbines have become operational. The desal-ination units will start functioning from October 2010. The plant would be fully operational in April 2011.

Saad Shareeda Al Kaabi, chair-man of the Ras Girtas Power Com-pany (RGPC) said the plant would be one of the key providers of desal-inated water and power in the coun-try. The plant, the latest and larg-est in the country, will be capable of providing 63 million gallons per day (MIGD) of potable water once the project becomes fully operational.

Faisal Obeid Al Sidiqi, executive manager of RGPC claimed the coun-try’s power generation capacity will double and water production will increase by more than 30 percent with the completion of the plant next year. The project work is progress-

Aggreko to raise dividend by 50 percent after H1 profi t jumpAggreko, the world’s biggest

provider of temporary power, on Wednesday said it would raise its interim and fi nal dividend by 50 percent after posting a jump in fi rst-half profi t, bolstered by contracts for major global sport-ing events.

The FTSE 100 fi rm said it would pay an interim dividend of 6.55p per share, after events such as the US Superbowl and FIFA World

Cup, for which it provided 300 gen-erators, generated £85m ($131m) in revenues in the fi rst half for its local business arm.

“Aggreko delivered another strong performance in the fi rst half of 2010 with reported reve-nue increasing by 17 percent and reported trading profi t increasing by 23 percent,” chairman Philip Rogerson said in a statement. “We believe that we will make further

ing according to the original sched-ule, said Al Sidiqi.

The US$3.8 billion plant has eight gas turbine generators, eight heat recovery steam generators, four steam turbine generators and 10 desalination units. Mitsui is the main contractor for the plant, which will give Qatar a total power generat-ing capacity of 9,039 megawatts and a desalination capacity of more than 320 million gallons per day.

The huge development of power generation and desalination capac-

ity is being done to ensure suffi cient power and water to meet an expected growth in demand and also for the possibility of exchanging power with the other GCC countries.

The RGPC is jointly owned by the Qatar Electricity and Water Company (QEWC); a consortium of Japan’s Mitsui, France’s Suez Energy International and Qatar Petroleum. Mitsui was awarded the engineering, procurement and con-struction contract which it sub-con-tracted to Hyundai Engineering and

Construction Company of Korea, Mitsubishi Heavy Industry of Japan and Sidem of France.

Qatar General Electricity and Water Corporation (Kahramaa), which would purchase power and water from the Ras Girtas plant, is the biggest partner of the project. Kahramaa, being the sole distrib-utor of water and electricity in the country, is expected to distribute an additional 1,600 MW of power and 20 MIGD of water with the partial commissioning of the project.

good progress in the second half and that the outcome for the year as a whole will be slightly better than our previous expectations.

The FTSE 100 fi rm said it would pay an interim dividend of 6.55p per share, after events such as the US Superbowl and FIFA World Cup, for which it provided 300 generators, generated £85m ($131m) in revenues in the fi rst half for its local business arm.

“Aggreko delivered another strong performance in the fi rst half of 2010 with reported reve-nue increasing by 17 percent and reported trading profi t increasing by 23 percent,” chairman Philip Rogerson said in a statement. “We believe that we will make further good progress in the second half and that the outcome for the year as a whole will be slightly better than our previous expectations.”

REGIONAL UPDATE

www.arabianbusiness.com September 2010 ● Utilities Middle East 7

Gas shortage in Eastern GCC Summer peak load deprive industry of power, leading to lost revenueCompanies in the east of the GCC have seen production suffer from the severe shortages in natural gas in the summer months.

A widening gap between supply and demand for the resource have accounted for losses at Ras Al Khaimah Cement Company and Construction Materials Industries & Contracting in Oman.

Ruurd S. Abma, chief operat-ing offi cer of RAK Gas, said much of the gas goes to the main power plants, creating a seasonal imbal-ance. “In the winter there is an oversupply as a lot less power is being used and we can narrow the gap between demand and supply. In the summer there is a short-age. The demand is always higher than the supply. It’s a complicated issue: cement companies are still running on gas though a few are operating on coal.”

He adds: “We’d love to get our hands on more gas. In the winter we may buy in from other compa-nies when they have a surplus, then in the summer we’re on our own, relying on our own supplies.

A fall in natural gas supply was one of the reasons cited by RAK Cement in its fi nancial results for

the fi rst half of this year, along with a decline in the building market. Mike Richardson, general manager, said this was mainly a summer issue. “This year it’s been

not too bad but we’ve still been affected for the last year which is why we kept that comment [in the company statement]. This summer we expected no gas.”

“The connection is to the sub-station and the companies are still trying to negotiate collectively for the price of connection,” he says. Richardson adds that there are fi nished towers in the emirate that are yet to be connected to an electrical supply.

Some companies have managed to avoid the squeeze through their own resources. RAK Ceramics, the biggest company of its kind in the world, told Construction Week that it has seen no shortage of power as it owns its own plant.

Other emirates are looking at alternatives. The cement fac-tory for the Sharjah Cement & Industrial Development Co. – which produces sulphate-re-sistant and non-resistant Port-land cement – runs on coal. RAK Gas, the state natural gas util-ity of Ras al Khaimah, says little can be done to address the short-age except an enhanced ability to gain supply.

Construction Materials Indus-tries & Contracting posted a net loss of OR34,474, compared with a net profi ts of OR337,935 for the same six months last year - partly, it says, due to problems with fuel.

Industry has been loosing money as gas shortages plagued the Eastern GCC this summer.

ACWA moves beyond Saudi with Oman IWPP purchaseSaudi power company buys 58 per-cent stake in Barka 1 IWPP.

ACWA Power International, a Saudi developer, owner and opera-tor of power and water projects, on Monday announced its purchase of a majority stake of the Barka 1 inde-pendent water and power project (IWPP) in Oman had been given regulatory approval. The acquisi-tion is part of the company’s strat-egy to expand beyond Saudi Arabia

borders, ACWA said in a statement.ACWA is buying a 58 percent

share from the AES Corporation, the IDB Infrastructure Fund and their subsidiaries. The remaining stake in Barka 1 is owned by Mul-titech LLC at 7 percent, while the other 35 percent is fl oated on the Muscat stock exchange.

The deal had been agreed to last December, and had been awaiting regulatory approval.

Barka 1 is part of the ACWA’s growth strategy and ambition to expand internationally.

“We are delighted to add this asset into our portfolio and to take the fi rst step beyond our home country,” said Paddy Padmana-than, ACWA’s CEO.

“Barka 1 IWPP will be important to our ambitious but well defi ned target of growing the asset base to 30,000 MW gross contracted capac-

ity of power and 5 million cubic meters per day of gross desalinated water by the year 2014,” he added.

The Barka 1 IWPP has a capacity of 456MW and 91,000 cubic meters per day of desalinated water. Located 60 kilometres northwest of Muscat, the plant feeds into the North Oman grid. The sole off-taker of both power and water is the Oman Power & Water Procure-ment Company (OPWPC).

REGIONAL UPDATE


implement smart building technol-ogy in the 21-storey Waseel Tower in Riyadh, the fi rst offi ce tower to adopt energy effi cient technology in the capital. The project will reduce power consumption and carbon emissions by 30 percent, says ABB.

ABB’s KNX technology will allow both tenants and the building’s facilities management staff to con-trol all the applications inside their offi ces, including lighting, heating, ventilating, and air conditioning, as well as room access and shading.

year net profi t of 1,17 billion net profi t. The new tariff has increased rates by 9.6 percent for non-house-holds, with private users still

Saudi Arabia is heading for green building regulationSaudi Arabia could have manda-tory green building regulation by end of year.

Green building regulation could become mandatory in Saudi Arabia by the end of 2010, as the govern-ment and the industry is working towards establishing a common standard, say people in the industry.

“We should have binding regu-lation by the end of the year,” said said Ali Nazzal, sales and opera-tions manager at ABB Smart Home and Intelligent Buildings Controls.

The Ministry of Electricity is working with the Green Build-ing Council and companies such as ABB and Siemens to establish a standardised system for energy and water savings in buildings, sim-ilar to the American LEED stan-dard. Once this has been worked out, it will be made mandatory, thinks Nazzal.

“In Saudi Arabia we have started to see how important energy effi -ciency is,” he adds.

ABB have just won a contract to

SEC shares hit two year highAdditional 30 percent increase predicted after tariff structure changes.

The SEC has seen its profi ts increase after it raised its tariffs for electricity.

The share price of the Saudi Elec-tric Company (SEC) continued its ascent, hitting a 28 months-high in spite of reports it had award a US$60 million contract to boost network capacity in Riyadh.

Shares of the monopoly provider of electricity closed at 14,15 Saudi riyals (SR) on Saturday, July 31, up 0.7 percent on the day, having risen from SR10,8 since June 5, when the company announced it would increase its tariffs for com-mercial, industrial and govern-mental users of electricity.

Ahmed Al Qahtani, analyst at NBC Capital in Jeddah, said that the new tariff structure will increase full year 2011 revenue by SR 3.2 billion, and predicted a fur-ther increase in the share price.

“The impact of the new tariffs will fi rst make itself felt in the third quarter. We believe that the share price will rise by another 30 per-cent in the next couple of months,” said Al Qahtani.

The SEC faces investments in the power generation and trans-mission and distribution infra-structure of SR 300bn ($80 billion)

until 2018, as demand for elec-tricity in the Kingdom is rapidly expanding.

But Qahtani believes that only a small amount of the extra reve-nue will be invested, with most of the funding being raised on the debt markets via sukus and and direct loans. “Most of the addi-tional money will go straight into net profi t,” he said.

In 2009, the SEC posted a full

paying 3.5 percent less than pro-duction cost, Reuters quoted Abdullah al-Shehry, governor of the Electricity and Co-genera-tion Regulatory Authority at the time. The increase raises the aver-age tariff for all users to SR0.137, up from SR0.125 previously, said the govenor.

The SEC has signed a SR 223 million ($59.46 million) deal with a local contractor to boost the capac-ity of its network in Riyadh, the Jed-dah-based Okaz daily reported.

The deal involves connecting the news Hittin No. 9005 substa-tion station to the electricity grid with a voltage of 132kv, the paper reports, citing Ali Al Barrak, chief executive of the utility which has a monopoly on electricity genera-tion, transmission and distribution in the kingdom.

The system also detects the occu-pancy of each offi ce suite.

The company has so far won three contracts in the Kingdom to apply its smart technology to this end: The Princess Noura Univer-sity, the King Abdullah Financial District, and the Information Tech-nology Communications Complex, all in Riyadh.

With mandatory regulation in place, business for his line of busi-ness is going to be brisk in the King-dom, believes Nazzal.

Predicted full year revenue in 2011, in Saudi RiyalsSource: NBC Capital

3.2 billion

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WEBPAGE


EDITORS PICK

New electricity highway powers through China

The high-voltage direct-current transmission (HVDC) system in China’s rainy Yunnan province stretches over nearly 1,500 kilometers .

ONLINE ANALYSIS

Most popular headlines1. Fuel transfer into Bushehr started2. Bidders lower price for Rabigh power plant3. SEC board approves $3.9bn for projects4. KAFD district cooling contract awarded5. Iran announced increased power generation6. UAE and US sign co-operation agreement7. ACWA moves beyond Saudi Arabia8. Dewa mandates HSBC as IWPP advisor9. Aggreko to raise dividend after profi t rise10. Israel has eight days to hit Bushehr, Bolton

ONLINE NEWS

Kuwait concerned over safety of Iran’s nuclear plant

SPOT POLL

Are Iran’s nuclear ambitions a threat to stability in the region?

YesNoDon’t know

63%

27%

10%

Hezbollah calls for Lebanesenuclear power plant

ADPC tendering utilities contracts for Khalifa Port Industrial Zone

Kuwait’s deputy premier and foreign minister stepped into the debate about Iran’s fi rst nuclear power plant by raising concerns about its safety.

The ADPC, in charge of constructing the Khalifa Port and Industrial Zone (KPIZ), is in the process of procuring core utilities infrastructure contracts.

Hezbollah chief Hassan Nasrallah called on Lebanon to consider building a nuclear power plant in the energy-starved nation.

NEWS ANALYSIS


Iran’s insistence on continuing enrichment programme leaves international community guessing at the regime’s intent

Iran’s lonely walk down the nuclear path

A satelite image of the Bushehr nuclear reactor on the cost of the Persian Gulf.

NEWS ANALYSIS

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concerns of Western powers, and the US and Israel in particular, that Iran is pursuing a nuclear weap-ons programme. Only days before the commencement of the fuelling process, John Bolton, the former US envoy to the United Nations, seemed to implicitly endorse an Israeli air strike on the site, stating that without intervention, “Iran will achieve something that no other opponent of Israel, no other enemy of the United States in the Middle East really has and that is a function-ing nuclear reactor.”

In reality, the likelihood of an attack on Bushehr is remote, not only because there are more worth-while targets to hit.

The fuelling process is being observed by the UN’s International Atomic Energy Agency (IAEA), who will ensure that none of the fuel is being siphoned off for military pur-

September 2010 ● Utilities Middle East 13

On August 21, amid nationwide celebra-tions, Russian engi-neers started loading

fuel into the Bushehr plant, Iran’s controversial 1000MW nuclear power project located on the coast of the Persian Gulf. Once the required 80 tonnes of uranium fuel have been installed, Bushehr will come online this month, according to Iranian offi cials.

This moment has been long in the coming. Construction on the reac-tor was started in the 1975 by Sie-mens, who abandoned the project after the Shah’s rule was replaced by the Islamic Republic in 1979. Work on the plant was resumed by Russia in 1995.

Bushehr has been at the centre of much controversy, based on the

poses. In addition, Iran has signed a fuel repatriation agreement, which stipulates that spent uranium will be shipped back to Russia. With these precautions in place, Bushehr is unlikely to pose a signifi cant proliferation risk.

NUCLEAR RATIONALEIran’s hardline regime has insisted all along that its nuclear programme is of an entirely peaceful nature. Skeptics might fi nd it hard to believe, but the rationale for nuclear energy is strong.

The regime, far from universally accepted since it usurped power from the Shah Reza Pahlavi in 1979, has been generously subsidising basic commodities, which include power and water, to prop up the country’s ailing economy, under-mined by the nepotism of the ruling elite and successive rounds of inter-

“Iran has been suffering from power shortages for years now”

Sam Ciszuk, IHS Global Insight

Ali Akbar Salehi, Iran’s nuclear chief.

Image captures the moment on August 21st the fi rst nuclear fuel rod is loaded into Iran’s Bushehr reactor, 35 years after the project began.

national sanctions. The mullah’s will be loth to destabilise their rule by scrapping subsidies and are too entrenched in their international pariah status for the sanctions to be rescinded.

“Iran has been suffering from power shortages for years now. They do sit on big gas resources, but they haven’t been able to develop them quickly enough to meet spiraling demand,” says Sam Ciszuk, an energy analyst at IHS Global Insight.

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NEWS ANALYSIS


This means that despite sitting on the fourth largest reserves of oil, and the second largest reserves in natural gas, Iran is experiencing a shortage of feedstock.

The problem is greatly exacer-bated by the long standing sanc-tions imposed on the country, which have prevented the purchase of modern oil extraction equipment. Oil is the main source of revenue for the state. But many of the fi elds are old, and in the absence of modern equipment increasing amounts of gas are pumped into the ground to extract the oil, further depleting gas reserves. “Iran has come to a situ-ation where they have to balance their needs, they can’t meet all their gas needs, and keeping the oil pro-duction high is necessary for the state. So trying to produce power by other means makes economical sense to them,” says Ciszuk.

AMBITIOUS PLANS, LIMITED MEANSEncouraged by its success with Bushehr, the regime’s nuclear programme is nothing if not ambi-tious. Last month, Alaeddin Borou-jerdi, the head of the Iranian parlia-ment’s Commission on National Security and Foreign Policy, told the state-run IRNA news agency that another 20 nuclear reactors are under construction. A total of 20.000MW are to be generated from nuclear power by 2025.

To ensure a steady supply of fuel, Iran will be expanding its ura-nium enrichment programme, accord-ing to Iran’s Nuclear Energy Organisa-tion chief Ali Akbar Salehi. The regime

is currently pursuing an enrich-ment programme at a site in Natanz. According to Salehi, another 10 such sites are in the pipeline, and “the construction of one of these facilities will begin by the end of the (current Iranian) year (to March 2011) or the start of next year.”

A week later, Iran’s fi rebrand president Mahmoud Ahmadine-jad signed the law that calls for con-tinued enrichment of uranium to 20 percent level, reported the Iranian news agency IRNA.

But the regime’s grand visions clash with its means. Having maneu-vered itself even further into diplo-matic isolation with its insistence on going ahead with the enrichment programme, Iran will be struggling to fi nd a country or a company will-ing to provide the necessary exper-tise. Even Russia, having hon-oured its agreement over Bushehr,

Only a few days after the fuel transfer was started in August, Kuwait became the fi rst neigh-bouring country to voice the concerns held by many in the region: Does Iran possess the necessary expertise to prevent an accident at the Bushehr nuclear power plant?

“We received Iranian assur-ances in addition to Russia as-surances saying that the tech-nology used in this station is sophisticated technology,” said deputy PM and foreign min-ister Sheik Mohammed Sabah Al-Sabah. “I will be worried be-cause there is a nuclear station that is very close to me regard-less of it being in Iran or any other location ... So we want to make sure that the technology used is of high level.”

Bushehr, on the coast of the Persian Gulf, is within 400 kilometres of Saudi Arabia, Kuwait, Qatar and Bahrain. The concerns of Iran’s neigh-bours are not entirely without

substance, thinks Sam Ciszuk, analyst at IHS Global Insight. “The Iranians operations don’t have the best reputation right now, they had a much better reputation a few decades ago, all has been deteriorating,” he says. “What happens if there is a kind of Chernobyl kind accident?”

But Holger Rogner, section head at the UN’s International Atomic Energy Agency (IAEA), is less concerned. “In my opin-ion, the Russian’s are building safe nuclear reactors, which have been tried and tested elsewhere,” he says, pointing out that the plant had been nearing completion when Sie-mens abandoned the project in 1979, and that the subse-quent additions have been state of the art.

“The Russians have an inter-est in everything working out smoothly. They want to remain active on the export market, after all,” he adds.

CHERNOBYL-ON-SEA: IS BUSHEHR SAFE?

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“The construction of one of these facili-ties will begin by the end of the year”

Ali Akbar Salehi, Iran’s nuclear chief, on the enrichment programme

Sam Ciszuk, IHS Global Insight

reatth

The Chernobyl nuclear reactor after the meltdown

Getty Images

NEWS ANALYSIS


will not want to take up another such politically sensitive contract, believes Ciszuk.

Furthermore, the growing inter-est in the nuclear energy, across the region and worldwide, means that energy companies are in no rush to embroil themselves in risky busi-ness, says Holger Rogner, section head at the IAEA: “The market has turned from being a buyers to being a sellers market. And even compa-nies that are still looking for con-tracts will give preference to politi-cally safe projects over establishing themselves in Iran.”

It is equally questionable whether Iran possesses the funds necessary to pursue the expansion, given that the sanctions and state subsidies are shrinking state coffers.

The only other way to gain access to the necessary technology is to reverse engineer Bushehr. But this process is time consuming, as well as expensive. “Even if they have the money, reverse engineer-ing would take a very long time. A second nuclear power plant within 15 to 20 years time looks very hard to achieve, let alone a 20 000MW generation capacity. That looks very unrealistic for a good few decades,” says Ciszuk.

WHY ENRICH?A sober assessment of Iran’s abil-ity to expand on its nuclear energy capacities leads to the inevitable question: Why is the regime push-ing ahead with its uranium enrich-ment programme when it will not

be able to use the fuel for civilian use in nuclear reactors? “They haven’t been able to answer that ques-tion favourably,” says Ciszuk. By the time Iran is able to bring online another nuclear plant, the coun-try will be host to a massive stock-pile of enriched uranium. This has intensifi ed suspicions about Iran’s true intentions. Once the uranium enriched to 20 percent levels, turn-ing it into weapons grade is a fairly

uncomplicated process, accord-ing to Ciszuk. This has heightened speculation that Iran is secretly pur-suing a weapons programme, even though, as Rogner says, “a smoking gun has not been found yet”.

Rogner understands the interna-tional concerns, but can also see the logic to the Iranian point of view: “The Iranians will be saying ‘We don’t even have access to spare parts for civilian purposes, so how can we expect to be confi dent in attaining the necessary fuel (for Bushehr)?’ That’s why they will want to be self-suffi cient at all costs. Economi-cally this doesn’t make any sense, an enrichment plant only becomes viable at about 10 to 12 gigawatt of nuclear energy production capacity, but from an energy security point of view it does.”

Nevertheless, as the enrichment programme continues, so does the threat of a military strike against Iran’s nuclear installations. While Bushehr is an unlikely target, Israel or the United States could be tempted to strike at the enrichment facility at Nantanz.

Nuclear power generation capacity envis-aged by Iran by 2030

20 000MW

The Bushehr nuclear reactor will be coming online this month, according to Iranian offi cials.

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NEWS ANALYSIS


recovery techniques, which raise production from mature and declin-ing oil fi elds.”

As the provision of cheap energy to the population is the economic foundation for the regime to sur-vive, and a rapprochement with the west seems incompatible with its beliefs, the sanctions in many ways strengthen the case for continuing to go down the nuclear route in the mullah’s eyes.

“They are struggling to get enough gas onstream, and have to prior-itise between sending it to power plants and using it for oil production. That is creating a vicious circle, and forces a rationale for nuclear power plants,” concludes Ciszuk.

With the regime strengthened after crushing the reformist move-ment in the wake of last year’s contentious election, tensions in the region are unlikely to ease off any time soon.

Ciszuk believes this possibility to be remote, however. “The US is clearly not keen on it. They are keep-ing the threat alive, in order to pro-vide a stick when it comes to negotia-tions. But it’s a very tough thing to do and the fall out will be tremendous,” he says. Those considerations will also encourage the US to restrain its regional ally Israel, which feels dis-tinctly uneasy about the prospect of a nuclear armed Iran. Yet, it is doubt-ful whether Israel even has the capa-bilities to hit a heavily defended site at such a great distance.

VICIOUS CIRCLEWhile a military strike thus seems doubtful, the fourth round of sanc-tions imposed on Iran by the United Nations in June are very real.

One of the prime consider-ations of the sanctions was avoid-ing the mistakes of the UN sanc-tions against neighbouring Iraq in Holger Rogner, section head, IAEA.

the 1900s, which not only failed to destablise Saddam Hussein’s rule, but arguably strengthened his grip on power.

Consequently, the sanctions are far more tailored, and are a thorn in side of the regime. “They are quite crippling but not in an immediate way, which I think makes a lot of people say the they aren’t working, “ says Ciszuk. “But they are crippling, because the oil and gas industry has very big problems to get hold of modern technologies, and the Iranian oil and gas sector is aging, they do need a lot of enhanced oil

“The market has turned from being a buyers market to being a sellers market”

Holger Rogner, IAEA

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a.

• Supporting frameworks for public private partner-ships (legal, regulatory etc.)• A revised approach to market pricing/ subsidising – tariffs that refl ect higher pricing at peak loads• Interconnection with other region’s grids, e.g. Africa• Aim at building alternate infrastructure based on in-cremental profi ts that are attainable from hydrocar-bons sold at market prices• Encourage grid connected renewables, e.g. Abu Dha-bi’s recent move• Increasingly lobby and support for a move towards smart grids• Mandating energy effi -ciency measures at points of consumption and productionSource: Frost & Sullivan

POTENTIAL MITIGATORS TO AN IMPENDING PROBLEM

GCC POWER GENERATION

Faced with an ever rising demand for electricity, GCC governments have to adapt their policies to ensure suffi cient power generation.

Finding solutions


POWER GENERATION BY TYPE

Demand for electricity in the region is closely linked to the need to pro-vide cooling to its inhab-

itants. In the hot summer months, electricity consumption spikes to a yearly high. Similarly, daytime use of energy far outstrips nighttime use, as air conditioners battle it out with the scorching heat.

It is thus unsurprising that peak loads is a key consideration to anyone analysing the regional power sector. Abhay Bhargava, who is industry manager for energy and power systems at Frost & Sullivan, sees a constant struggle to keep power generation capacity ahead of peak demand.

“Peak demand will be increasing until 2020, and you see megawatt generation trying to follow up,” he says. “The question that comes to mind: Whatever the government invests in generation, are they really just chasing peak loads? And is that the right way to handle your invest-ments, or is there something else you can do? “

To underline his point, Bhargava points out that European and US power companies typ-ically try and have a margin of around 25 percent between peak demand and installed capacity. In compari-son, demand in Kuwait reached 99 percent of

In 2020, were still talking about an excessive reliance on gas, and if you start looking at wind and other renewables that’s a really small per-centage of the total,” says Bhargava.

It is not that there have been no efforts made to diversify away from gas. Abu Dhabi has taken the lead on the nuclear front, with a four nuclear reactors coming online from 2017. Saudi Arabia, and Kuwait are amongst the other coun-tries looking into the nuclear option.

10.9% 1.7% 6.6%

49.2%

31.6%

Steam turbine gas turbine combined cycle diesel others

capacity in July. Saudi Arabia expe-rienced blackouts this summer as peak demand exceeded capac-ity. In Sharjah, power outages have become a common feature in the summer, as the emirate is unable to secure suffi cient gas feedstock after a delivery arrangement with Iran failed to materialise.

Sharjah serves as a good example for an overreliance on gas, a prob-lem that is not going to go away any time soon. “Lets look to the future:

Source: Frost & Sullivan

Faced wdemangovernpoliciepower

ments, or is there something else you can do? “

To underline his point,Bhargava points out that European and US power companies typ-ically try and have a margin of around 25percent between peak demand and installedcapacity. In compari-son, demand in Kuwait reached 99 percent of

Steam turbine ga

Abhay Bhargava, industry manager at Frost & Sullivan.



cooperation in developing the nuclear sector.

Yet nuclear is no easy fi x. One of the big hurdles is creating ade-quate regulation, something that

Both countries have commissioned studies looking into the feasibility of nuclear power, and Kuwait has signed a Memorandum of Under-standing (MoU) with France for

cannot be put into place overnight. “There are still a lot of regulatory constraints that impact the nuclear option, and it does take long to go down that path,” says Bhargava.

Furthermore, a rush to building up nuclear power capacity across the region could lead to shortages in the supply of fuel, and technical expertise, especially as the inter-est in this form of energy genera-tion is not constrained to the GCC, but to the entire Middle East. “If everyone hops on the nuclear band-wagon, you are going to end up with higher than projected cost. This is important from an investment per-spective, and also when comparing different fuels.” So far, there is little indication that enough is being done to train up a suffi cient base of skilled manpower, thinks Bhargava.

Renewable power similarly making headway in the GCC, with Abu Dhabi once again taking the leading role. The UAE’s big-gest emirate has pledged to pro-duce seven percent of its energy needs from renewable sources by

GCC REGION: INSTALLED CAPACITY VS PEAK DEMAND

INSTALLED CAPACITY PEAK DEMAND

KSA

44.6

40.9

23.6

16.3

5.3 4.5

12.610.5

4.0 3.6 2.8 2.5

UAE QATAR KUWAIT OMAN BAHRAIN

50

40

30

20

10

0

GW

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2020, and is engaged in a number of projects, ranging from building the world’s second largest concentrated solar power plant to initiating a pro-gramme for solar panels on the roof of private homes.

Signifi cantly, Abu Dhabi is also implementing a form of feed-in tariff to accompany these efforts. Feed-in tariffs are common across the world, and are a quasi-subsidy encouraging the generation of power from renew-ables on a small and medium scale.

To Bhargava, tariffs are the crux of the matter, and the key tool at the disposal of governments to solve their power conundrum.

Currently, GCC utilities are selling electricity to households and indus-try at subsidised rates. Whereas in the US rates vary between US$0.06 and $0.11/KwH, Abu Dhabi sells its power for only $0.04/KwH.

Saudi Arabia, which recently hiked its rates, is still selling at around $0.04-0.05/KwH. Rates like these encourage wasteful consump-tion, and increase the burden on power generation.

Governments are hesitant to increase tariffs, fearing that this will make the nascent industries they are trying to foster. While sympathetic to such concerns, Bhargava points out that higher electricity costs have not made industry uncompetitive elsewhere. “Of course you want to make sure the industry is competi-tive, but the US still manages to pro-

duce at those rates and are not being pushed out of the global set up.”

He believes that tariffs can be used to curb consumption at peak times, so bringing down the peak loads, without inhibiting economic growth. Companies should be able to adjust their production patterns to work around peak hours. “If you are capable enough to restruc-ture your manufacturing activities, increasing consumption at times that are not peak load, you stand to benefi t as well. So the choice is still there. Its not monopolistic or dicta-torial in that sense, and the tariffs will become competitive.”

If the peak load can be reduced, so

is the pressure on power providers to ramp up their installed capacity to meet the worst case scenario.

SUBSIDISE RENEWABLESAnother problem with subsidis-ing electricity is that the only way to sell at below production cost is to provide cheap feedstock. This represents a huge loss in profi t, as oil and gas that could fetch good money on the international mar-kets are instead sold at a low price to domestic power producers. “You are actually selling it at below the market rate, the same gas that could be sold at $80 is now being sold at a 25 percent discount,” points out Bhargava. This practice contin-ues unabated, with Saudi Arabia recently announced that it would increase its power generation based on crude oil.

Instead of using their raw mate-rials to produce cheap fossil fuel based energy, GCC countries should sell some of this feedstock abroad at the market price, and use the resulting profi ts to invest heav-ily in renewables, says Bhargava. “People always ask how you can sub-sidsise the capital costs of renew-ables. All you need is a marginal shift to exporting some of the domestically committed hydro-

carbons for profi ts to invest in new renewables projects. “

GRID SOLUTIONSGCC member states have not been idle in terms of grid, with the GCC interconnection grid connecting the entire region by 2012. The grid is being built to prevent power outages by shifting power from one coun-try to the next, and even laying the groundwork for a regional power market. While Bharava is enthusi-astic about the grid, he does con-cede that GCC countries broadly have the same peak hours, limiting the opportunity to reduce the peak loads through the timely shift of power from country to country.

There is, however, the possibil-ity of extending the grid. Saudi Arabia and Egypt have been in talks about linking their grids with media reports predicting a tender for a US$1.5 billion project of this kind in January. Ambitious minds see the GCC linked with the EU and the Mediterranean countries, and the Desertec project, which aims to generate solar energy on a massive scale in Northern Africa.

Whatever the solution to the region’s power problems, it will not be found without thinking outside the box.

GCC INSTALLED GENERATION CAPACITY BY COUNTRY

PROJECTED GCC PEAK DEMAND AND GENERATION CAPACITY

5.2%

5.7%

13.4%

25.2%

47.6%3.0%

KSA UAE QATAR KUWAIT OMAN BAHRAIN

Dem

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Gen

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160

120

80

40

0

1500

1200

900

600

300

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Peak Demand (GW) Energy Generation (GWh)

78

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80

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160

SECTOR ANALYSIS


Steam Turbines: The lack of gas availability is pushing power plants in Saudi Arabia to favour the use of steam turbines.

Continued opportunities in the GCC power market calls for solid posi-tioning of companies wishing to pursue these opportunities, writes Ann-Marie Carbery Antoun, director at energy consultancy Contax Partners.

H istorically, the power sector has been the largest of the energy sectors in the GCC,

accounting for a 30 percent share of energy investment over the past four years. Collectively, the GCC countries produce around 273 billion kWh per year of electric-ity, largely from oil or gas fuelled power stations.

Economic growth in the region, however, has strained the infrastruc-ture of the world's largest oil export-ers, and as a result power supplies remain tight. Certain countries in the GCC often experience power

Opportunity abounds

Over the past 25 years, Contax Partners has been developing a robust opportunity pipeline methodology to ensure that contractors, service providers and suppliers do not miss potential opportunities and are informed and positioned to target the right opportunities. Contax Partners’ optimised approach to opportunity management begins with the gathering of market intelligence on projects and the market as a whole and these key inputs are used to stock the opportunity pipeline For example, of the 45 GW of electricity generated in 2009 in Saudi Arabia, only 2 GW was generated from combined cycle (CC) gas turbine (GT) units. This intelligence supports the fact that in the upcoming fi ve years many of the simple cycle gas turbines in the Kingdom (485 out of 549 units are simple cycle) have plans to be upgraded, thus placing a signifi cant demand on certain pieces of equipment and related upgrade services in the country. This information allows Contax Partners to identify all the relevant projects that are impacted by this market insight, and that may refl ect potential opportunities for a particular client.

THE CONTAX PARTNERS METHODOLOGY

SECTOR ANALYSIS


Saudi Electricity Company’s (SEC) expected peak loads are set to increase from around 43

GW in 2010 to 68.5 GW by 2019 (Source: SEC)

shortages and temporary blackouts due to tight supply margins.

As power demands continue to rise with estimates suggesting that the annual growth in GCC power demand is around seven to 10 per-cent, some Gulf countries continue to take steps towards easing the power crunch. As such, the power sector continues to attract signifi -cant investment in the GCC. In 2010, the power sector is forecast to cap-ture 25 percent of total GCC energy capex spend for the year, and during the period 2010 – 2012, the power sector will account for 18 percent of GCC energy capex spend.

SEC EXPECTED PEAK LOADS 2010-2019

TOTAL PEAK LOADS (GW)

SAUDI ARABIA: THE BIG SPENDERSaudi Arabia will be one of the main contributors to power proj-ect spend during this period, and a large percentage of the invest-ment in the power sector in Saudi will be driven by Saudi Electricity Company (SEC), the main com-pany responsible for Power Gen-eration, Transmission & Distribu-tion in the Kingdom.

The investment requirements in the Saudi power sector are driven signifi cantly by the expected rise in peak loads between now and 2019 (see fi gure 1). In 2009, SEC’s total existing generation capacity was around 45GW, com-pared to an expected peak load of between 43 and 44GW in 2010. This tight margin between supply and demand further highlights the need for additional capacity over the coming years.

With the huge forecast expan-sion in population growth in the GCC over the coming years, the strategic emphasis placed on industrial diversifi cation, the existing strain on utili-

ties across the GCC, and the subsequent contin-

ued investment into capacity additions in the region, it is clear

that there will be an abundance of oppor-tunities in the GCC

capacity wapared to anof between This tight mand demathe need fover the c

With thsion in poGCC ovthe straon induthe ex

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power industry. In the west of Saudi Arabia, for

example, there is a severe lack of gas availability, thus pushing power plant expansion there to favour the use of steam turbines, and placing a dependence on steam technology. Meanwhile, in combination with the depen-dence on steam technology, the huge reliance in the country on heavy fuel also places a signifi cant

dependence on the use of auxil-iary boilers.

These, plus many other exam-ples, represent an extensive landscape of varied opportuni-ties in the power sector in Saudi and other GCC countries for which contractors, service pro-viders and suppliers to the power sector need to be well positioned if they are to capitalise on such opportunities.

WATER TRANSMISSSION


Water transmission systems in the Middle East are expanding at a rapid pace, which means good business and not a few challenges for the companies responsible for designing and engineering them

Water ways


W ater not only sus-tains life, it also fuels growth. In a region experi-

encing rapid population growth as well as increasing urbanisation and industrialisation, business in building and upgrading water transmission system is brisk. The Middle East is thus a growth area for companies that model and design such systems.

“The Middle East is extremely important to us, its one of the fastest growing, if not the fastest growing part of our water business,” says Richard Zam-buni, global mar-keting director, geospatial, at Bent-ley. “And the reason the Middle East is so important is for a syndrome of issues: you’ve got very fast population growth, and the population is nearly all in densely pop-ulated cities. The infra-structure is being

built, in most cases, it doesn’t pre-exist. Its being built now to service these growing populations.”

On top of building new infrastruc-ture comes the need to replace ageing existing water transmission systems. Small wonder then that Bentley have recorded impressive growth fi gures over the last four years, with compounded growth of around 25 percent in the Middle East and Africa.

important to us, its one of the fastest growing, if not the fastest growing part of our water business,” says Richard Zam-buni, global mar-keting director, geospatial, at Bent-ley. “And the reason the Middle East is so important is for a syndrome of issues:you’ve got very fast population growth, and the population is nearly all in densely pop-ulated cities. The infra-structure is being

“Recent development shows how impor-tant the regional market is to MWH”

Sudhir Kumar, MWH

MWH, one of the other big play-ers in wet infrastructure design and engineering, are similarly commit-ted to the region. Last year, the com-pany made the Middle East region one of its four distinct geographic business areas, alongside Europe, the Americas and Asia. “Recent development shows how important the regional market is to MWH,” says Sudhir Kumar, principal civil engineer and engineering group manager at MWH in Dubai.

DESALINATION TO DESTINATIONOne of the determining factors of water transmission in the region is the heavy reliance on desalina-tion to produce potable water. This means that drinking water often has to travel long distances before it arrives at cities and developments located inland.

Zambuni points out that most big cities in the region are either costal, or can other-wise be supplied by river water. Nevertheless, this does not apply for all major

urban centres. Deliver-ing desalinated water to places that are both far from the sea and high in elevation,

such as Al Ain, Riyadh and Harare is expensive, says Kumar. “After being desalinated at Jubail and Ras Alzaur in Saudi Arabia, water is pumped over 400 kilometers inland through a number of pipelines tothe capital city of Riyadh making it one of the most expensive water supply schemes.”

Long distance water convey-ance necessitates careful planning, taking into account issues such as security of supply, water age, risk of contamination and water disinfec-tion requirements. To this must be added higher capital, operation and maintenance costs.

AT A LOSSThe key challenge for water distri-bution worldwide is minimising the amount of water lost in transit. While water loss might be associated with burst water mains fl ooding roads by the general public, the real damage is done by small leaks and creaks in piping and joints. Losses can range from 10 percent to up to 60 percent.

The reasons for this loss can be manifold. Materials are a common culprit, especially if age comes into play. “In older systems you’ve got things like cast iron pipes. Cast pipes typically fracture at some point, and they are subject to catastrophic fail-

SUDHIR KUMAR, ENGINEERING GROUP MANAGER AT MWH

WATER TRANSMISSSION


Zambuni believes that utilities in the Middle East have yet to rec-ognise the importance of some of those aspects, with design and con-struction seen as more important than looking to optimize the oper-ation of the system once its opera-tional. “At the moment the focus is on building and designing good networks, and getting the infra-structure in the ground, and less on operational optimisiation, as there is in Europe and the US. That hasn’t come yet, but its just a matter of time.”

WASTEWATER – STAY BIG, GO SMALL?Given the cost of transmission sys-tems, and the fact that human set-tlement in the Middle East can be sparse and intermittent, there have been calls for a greater decentral-isation of wastewater plants. This would entail both a scaling down of

ure more than plastic piping. Where you’ve got cast iron pumps and joints that have degraded over decades, that’s when you get the more seri-ous problems,” explains Zambuni.

In densely populated areas, this problem is exacerbated by the fact that utilities tend to pump water through the system at a higher pres-sure. This pressure then forces more water through leaks, increas-ing the water loss.

“What you need to do is model the demand curves, model the pres-sure curves, make sure you’ve got the right sized pipes, valves, make sure the network is constructed in the right way to not stress it at any point. So the pressure you’re using in the network is as even as possi-ble,” says Zambuni.

What else can be done to keep water loss to a minimum? “The old saying ‘prevention is better than cure’ is equally applicable to water supply systems” says Kumar. “Proper planning, design and high quality construction is the fi rst step in minimising water leaks and wast-ages.”

“There are a number of factors, from planning and design to the operation and maintenance stage that affects the system effi ciency,” he continues. “Correct hydrau-lic design parameters and suitable pipe material selection are some of the key parameters during planning and design stage that can severely affect the distribution system if not selected appropriately.”

Equally, appropriate construction methodology and procedures are important.

“Pipe bedding, soil compacting, pipe jointing, thrust restraints at bends, fl exible joints near struc-tures are some of the key features that require strict quality control during project execution to avoid premature failure of the network. We have witnessed a number of water networks that experienced multiple failures during commis-sioning due to poor construction,” says Kumar.

In contrast to neighbouring countries to the south and east, Lebanon has adequate water resources but at presently lacks transmission systems in areas where it is most needed.

The capital Beirut currently suffers from a severe water shortage, a situation anticipated even before the 1970’s confl ict, and this project is intended to alleviate the situation by transferring water from the Awali River in South Lebanon to Beirut. The current potable water demand in Beirut is estimated at 780 million litres per day (MLD) with a predicted defi cit of 368 MLD during the driest month (October) of an average year, a defi cit of 368 MLD is predicted resulting in intermittent water supply in Beirut.

The consultancy MWH has been engaged by the Council of Development and Reconstruction to update a feasibility study which was carried out in 1994 and to prepare tender documents for the scheme. This includes treatment and transmission of 520 MLD water in two phases with the possibility of expansion to 780 MLD. Phase I will treat and transmit only 260 MLD which will go some way in meeting the current defi cit. Essential components of the scheme are:• Abstraction of water from the existing tunnel at Joun (south of Beirut) and delivery to the treatment plant at Ouardaniye via a four kilometres long, 2800mm diameter tunnel.

• Treatment to accepted potable water standards at Ouardaniye.• Transmission of treated water from Ouardaniye to the Khalde via a 22 kilometre long, 2800mm diameter tunnel• Transmission of treated water from Khalde tunnel to number of new reservoirs located in South Beirut via a 30 kilometre gravity main.

The abstraction and delivery points are 35 kilometres apart. In between lies a highly varying topography characterised by hills and steep valleys. The two options explored were a water tunnel and coastal pipeline for the transmission of water from Joun to Khalde. After a detailed techno-economical analysis, the tunnel won out.

The scheme makes use of gravity fl ow by taking advantage of available hydraulic head between extraction and delivery points. The preliminary cost estimate for Phase 1 (260 MLD) is US$350 million. The project works is divided into three contract packages covering 2800mm internal diameter x 26 kilometres of water tunnels in Package 1, 260 MLD Water Treatment Plant in Package 2 and 30 kilometres of water pipelines and service reservoirs under Package 3.

MWH has already prepared the tender documents for Package 1 and 2, the pre-qualifi cation procedure for both the packages is expected to start towards year end. The project will be completed in three years.

CASE STUDY

SOLVING BEIRUT’S WATER PROBLEMSMHW’s Sudhir Kumar writes about the Awali-Beirut Water Supply Scheme.

WATER TRANSMISSION


ically evaluated considering key factors such as project catchments, topography, total demand, ground condition and other design require-ments,” says Kumar.

But centralisation is the better option in most cases, thinks Zam-bubi: “Plants are expensive to build and operate, typically you have rela-tively few wastewater plants because they are expensive pieces of kit to put together. So its still cheaper to have quite a lot of pumping than to have a lot of wastewater plants.” Zambuni points also to the increas-

wastewater processing plants and of water transmission networks.

Both options have their cost advan-tages. Large, centralised plants

are low in production cost, yet high in transmission cost, while the opposite is true for decentralised plants. As the experts point out, a decision on the size of the plant should be taken on the basis of every individ-

ual case. “There is no fi t for all solutions and each case

should be techno-econom-

ing trend towards green solutions, which is evident especially in power generation, where decentralised small-scale plants contribute to elec-tricity production. Likewise, eco-logically friendly wastewater treat-ment plants are starting to come to the market. He feels that the time is not right for those solutions from a cost perspective: “Water is different from other utilities, such as distrib-uted power generation through bio-mass, for instance. With wastewater, the economics point to larger plants in smaller numbers still.”

tages. Large, centralised plants are low in production cost, yet

high in transmission cost, while the opposite is true for decentralised plants. As the experts point out, a decision on the size of the plant should be taken on the basis of every individ-

ual case. “There is no fi t for all solutions and each case

should be techno-econom-

“At the moment the focus is on building and designing good networks, and less

on operational optimisation”

RICHARD ZAMBUNI, BENTLEY

ECONOMICS STILL FAVOUR LARGE SCALE PLANTS AS OPPOSED TO DECENTRALISED

WASTEWATER TREATMENT OPTIONS.

DESIGN SOFTWARE


Software

helps re

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process, m

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s work d

uplication, an

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down the cost o

f constru

ction an

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DESIGN SOFTWARE


Power plants are large and complex operations that require the cooper-ation of different engi-

neering disciplines. As designers and engineers start putting together the various elements of the plant, ranging from the layout to the inte-gration of instrumentation and con-trols, the design process is in a con-stant state of fl ux. One of the most signifi cant benefi ts of software is that it helps to coordinate the vari-ous design threads in real time.

“The problem is, that in gen-eral for power plants to be effi cient they need to be large, and so there-fore it becomes more of an integra-tion issue for all the different disci-plines that are involved in the design of a plant. Typically that will involve some architecture for the build-ings, structural engineering and mechanical engineering for the equipment, as well as electrical engineering, control and instru-mentation, and so on,” says Mark Biagi, solutions executive for power generation at Bentley.

“Making sure all major plant com-ponents are designed and accounted for, and that each engineering group affected by those components has the most up-to-date information is one of the most important con-siderations,” says Keith Denton, vice president, global power indus-try at Intergraph.

“Power plant designers spend much more time reacting to change and validating data than they do in creating the data in the fi rst place. Software helps to reduce the neg-ative impacts of those changes by notifying users earlier in the pro-cess so they can avoid purchasing incorrect components or producing incorrect drawings,” he adds.

Ensuring that the vast amount of data needed for the construction of a plant is collected and distributed in the right way is crucial, agrees Mike Blalock, global industry direc-tor, energy and utilities, at IFS. “To succeed, a system must be imple-


Reducing construction costs is especially important when the con-struction of a power plant is con-tracted out, as is often the case in the Middle East. Engineering, procure-ment and construction (EPC) com-panies need the certainty that a plant will be completed, and completed at

“The construction phase is by far the largest initial cost of the plant”

Keith Denton, Intergraph

Mike Blalock, IFS. Keith Denton, Intergraph.

the projected cost. “It is crucial that EPC contractors can have confi -dence that the design can be con-structed because, particularly in the Middle East, were you have contrac-tors who are working to fi xed price scenarios. They procure and con-struct the power plant for a fi xed fee and if they get that wrong that could dramatically affect their profi tability,” says Biagi.

CO-OPERATION IS KEY To achieve cost effi ciency, collabo-ration between various stakehold-ers is important, thinks Guy Barlow, industry strategist at Oracle Prima-vera. And software can help achieve this cooperation. “Owner operators and engineering, procurement and construction companies are begin-ning to recognise the need for an integrated technology solution that enables all construction partici-pants to focus on the project with full collaboration and visibility.”

“The benefi ts of accurate infor-mation being available to all par-ties, both internal and external, of a dynamic repository of plant data are signifi cant,” agrees Blalock. “These capabilities result in more effec-tive and effi cient operations across the entire plant lifecycle, whether it is in facilitating collaboration with contractors during construc-tion, streamlining commissioning, facilitating licensing, improving

mented to support the setting of standards for data collection and for the collaboration of all stakeholders in the enterprise. This dynamic plant repository of data is critical to the overall success of the endeavour.”

SAVINGS FROM THE STARTSoftware can also help to keep costs down during the construction phase, says Denton: “The construc-tion phase is by far the largest initial cost of the plant, so by lowering con-struction costs the life cycle cost can also be improved.” Intergraph have devised the Smart-Plant Construction programme, which helps construction planners and fi eld personnel make use of design data as soon as it is available. This enables immediate decision making when executing installation work and tweaking project sched-ules, and visualises potential prob-lems and alternative actions.

DESIGN SOFTWARE


effectiveness in O&M in operations, and so on.”

Barlow points to integrated pro-gramme management (IPM) soft-ware, which streamlines design and construction.

“It must not simply be another tool to reduce project risk, but be a vehi-cle for optimising the asset lifecycle management process in the plan-ning, building, and operating phases of the capital asset,” he says.

Using software during the design process can also help to reduce risks and lifecycle costs for power plants. “By employing software at this stage, power plants are able to identify common scheduling pit-falls that may result in misleading schedule or risk analysis results,” adds Barlow.

He speaks of Enterprise Project Portfolio Management (EPPM), which gives an overview of the plant at the design stage and helps optimise resources and the supply chain. “EPPM solutions have the ability to reduce costs, manage changes, meet delivery dates and ultimately make better decisions, all by using real-time data once the plant is fully operational.” Reducing life cycle cost is particularly relevant

Design software pulls together the various engineering disciplines, fostering co-operation.

“The cost of any decisions taken at the design stage are magnifi ed during the

life cycle of a facility”Mark Biagi, Bentley

helps reduce shutdown and turn-around time by matching resources to the workload and increasing wrench time.

“Millions of dollars and the suc-cess or failure of critical projects – like a refueling outage – are on the line every time a skilled craftsman lays a wrench on an important piece of machinery.”

NEW GROUNDAs expected in a competitive market, companies are always look-ing to development their products. One of the latest developments is the inclusion of so-called ‘wizards’, says Intergraph’s Denton. While appli-cations that relate data to the CAD drawings and models that are cre-ated have been established in other plant industries for around 20 years, one recent development to this tech-nology is the inclusion of automa-tion that helps engineers work more effi ciently inside the actual design tools by leading them through the

various options and design con-siderations. This ensures that the design is done correctly up front and greatly reduces the amount of checking and editing done in later steps, says Denton. “Tools used designing today’s plants should have the ability to build in the ‘insti-tutional knowledge’ of standard work processes that younger engi-neers can leverage inside the tech-nology,” he adds.

Earlier this year, Oracle brought to the market AutoVue 20.0. The AutoVue Enterprise Visualisation programme helps viewing, review-ing and collaborating on asset and engineering documents and infor-mation across a global enterprise. “The solution has helped thou-sands of users in engineering, main-tenance and operations access and work with the technical infor-mation they need to support plant shutdowns, plant optimisation and routine maintenance activities,” says Barlow.

for power generation in this region. Public private partnerships are becoming increasingly common in the Middle East, and for the private companies involved, keeping life cycle down is vital. “The costs of any decision taken at the design stage are magnifi ed during the life cycle of a facility,” says Biagi.

SMOOTH OPERATING Software is, of course, also used to run power plants once they are in operation. The challenges faced by utilities are numerous, from rising regulatory pressures and consumer demand for lower prices, to a short-age in skilled workers and the need for cleaner forms of energy.

“EPPM software enables power plants to create ‘what-if’ scenarios, allowing project stakeholders to see how even a slight contingency will affect the project and how different responses will have an impact on the budget and schedule. These solu-tions can also help optimise opera-tional metrics and help ensure the right people are on the right project at the right time,” says Barlow.

The importance of maintenance has never been greater, says Barlow, who assets that EPPM software

The construction costs of a power plant can be reduced by management software.

Middle East Office: Bahrain | www.omicron.at | [email protected]

Testing Solutions for Protection& Measurement SystemsRelays, Meters, SCADAIEC 61850 DevicesTransducersPower Quality Analyzers

Testing & Diagnostics Solutions for Transformers & Primary Assets

Power FactorMoisture in Insulation

Sweep Frequency Response AnalysisPartial Discharge

Advanced Transformer Diagnostics

Innovative Power System Testing Solutions

ELECTRICAL TESTING


Testing and diagnostic providers are profi ting from the rapid expansion of the power distribution and transmission sector, while having to deal with the consequences of growth

Growing pains


W ith the power infrastructure in the Middle East expanding at a

rapid pace, suppliers and service providers of electrical testing and diagnostics are confronted with a very particular market.

“It is still a relatively young market in that much of the installed plant and machinery is less than 30 years old compared to Europe or North America, where it can be over 60 years old,” says Andy Hedgecock, Middle East manager at Omicron. “Therefore the need for testing and diagnostics has not been so high but of course that has rapidly changed over the past ten years.”

On the other hand, the growth of the sector means that business

is brisk. “The electrical power and industrial infrastructure is expanding an incredible rate and so now the latest testing methods are being applied along with new technologies. The combination of these two factors means that demand for electrical testing and diagnostics is exceptionally high in the Middle East,” says Hedge-cock, who describes the region as an impor-tant market for Omi-cron, accounting for 12 percent of its worldwide business.

“The Middle Eastern market differs to other markets in the

world in terms of degree, pace and scale of development of both the electrical infrastructure and the industrial base,” sums up Nick Parton, sales manager at Megger, who have been growing at around 15 percent in the region over the last fi ve years.

Those growth rates were not sig-nifi cantly impaired by the recession. Both Hedgecock and Parton speak of a relative decline in business, albeit not at the rates experienced before. “There was no real decline, more of a temporary slow-down as budgets were held back to see how serious the recession was but by the end of the year it was business as usual,” says Omicron’s Hedgecock.

Megger, who equally did not expe-rience a serious downturn in busi-ness, could yet suffer from a sting in the tail of the recession, says Parton: “The question is still ‘will’ rather than ‘did’. Our business tends to come at the end of the project, and the slowdown in new projects during the last 18 months has prob-ably still not hit us fully yet.”

CONSCIENTIOUS CUSTOMERS?With the power infrastructure in the Middle East still young, and util-ities going through a steep learning curve, electrical testing and diag-nostics was not always on the fore-front of customer’s minds. But this has now changed. “Until the 1990’s there was a general ‘install and forget’ approach but there has been a distinct and recognizable change throughout the region and clients are now very aware of what should be considered,” says Hedgecock.

Power transformers represent the most expensive link between the generation and utilisation side of energy, writes Omicron’s Andy Hedgecock. Due to the cost pressure of a de-regulated energy market, utilities have shifted maintenance from time-based to condition-based approaches. This development requires reliable diagnostic tools.

Water entering in oil-paper insulations can cause three dangerous effects: it decreases the dielectric withstand strength, accelerates cellulose

aging (de-polymerisation) and causes the emission of gas bubbles at high temperatures. Therefore an accurate knowledge about the actual moisture concentration is required in order to decide if further corrective action, such as on-site drying, is necessary.

Moisture enters transformers from the atmosphere (breathing, leaky seals) and during installation and repair. Aging of the oil-paper-insulation also increases the moisture level. Thus, even in the case of a non-breathing

transformer, the moisture can reach a dangerous level.

Dirana analyses the moisture content of the paper/pressboard insulation. The test result is an independent quantity that can be compared to other moisture analysis techniques. Typically the solid part of the insulation structures, the pressboard, paper and wood holds most part of the water, 200 times more than the oil. Thus the moisture concentration in the solid insulation is much more important than that in the oil.

PRODUCT FOCUS

OMICRON’S DIRANA DIELECTRIC RESPONSE ANALYSER

he electrical power al infrastructure is

n incredible rate and atest testing methods plied along with new

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NICK PARTON, MEGGER

ELECTRICAL TESTING


The new Delta4000 insulation diagnostic system will perform all the usual tests that the user will expect from a 12kV Tan Delta test set, writes Nick Parton, sales manager at Megger. This includes the power factor, dissipation factor, capacitance, excitation current, leakage reactance and turns ratio to provide an electrical insulation condition assessment in high voltage apparatus such as transformers, or circuit breakers. It operates over a wide sweep frequency range, and comes in a very lightweight

2-piece construction to maximise portability.

The unit introduces two (pat pending) features that are new to this type of instrument.

Firstly, the ability to automatically detect if the insulation is showing non-linear properties and advise the operator that a ‘tip-up’ test should be performed to further investigate the problem. Secondly, the ability to perform temperature correction specifi c to the object being tested. It has long been established that the standard temperature

correction curves used to standardise measurements for comparison purposes are severely limited.

As well as using the standard correction curves, the Delta4000 gives the option of using ‘individual temperature correction’.

By measuring the dissipation factor over a wide sweep frequency and using built-in mathematical formulas and models of insulation characteristics, the correct temperature correction can be determined.

PRODUCT FOCUS

THE MEGGER DELTA4000 INSULATION DIAGNOSTIC SYSTEM

While the appreciation for reg-ular check ups and maintenance is there, growth rates and the sub-sequent growth in personnel can undermine those good intentions, believes Parton: “The pace of devel-opment and the regular infl ux of new staff puts a lot of strain on the ability for people to keep up with the demand for testing in the installa-tion and commissioning area as well as on the preventative routine main-tenance side.”

MANPOWER SHORTAGEAnother critical problem diagnos-tics companies are faced with today

is fi nding suitable staff for their operations, even if there has been progress.

“The situation has improved dra-matically in recent years but the training of local employees is still a key factor across the region,” says Hedgecock.

The answer, he believes, lies in training staff up. Omicron’s regional offi ce has facilities for both theoreti-cal and practical training in addition to courses that are performed at site with customers.

While there is much debate about adequate provision of higher edu-cation in the Middle East, Parton thinks that it is not the qualifi ca-tions that are lacking. Rather, it is the absence of adequate experience that is hampering recruitment.

“The problem is fi nding people with both the qualifi cation and the relevant experience,” he says. “The electrical supply industry world-wide suffers from a lack of experi-enced qualifi ed personnel.

As equipment has become more sophisticated and automated over the years, the level of knowledge required to keep that machinery in operation, and the number of people required, has declined, says Parton. In response to this, utilities have de-staffed, and thus de-skilled.

“With the boom a couple of years ago there simply weren’t enough people about to do the work,” fi nds Parton.

SITE VISIT


V isions in the GCC tend to come in a super-sized format. Mega projects such as the

King Abdullah Economic City in Saudi Arabia testify to the ambi-tion of governments to haul their countries into the modern age by creating vast expanses of infra-structure for industry to develop.

Not to be outdone, Abu Dhabi is similarly seeking to diver-sify itself away from fossil fuels, using the massive wealth gener-ated from oil revenues to work

on its Abu Dhabi 2030 strategy. To facilitate this vision, the Abu Dhabi Ports Company (ADPC) has been tasked with building the Khalifa Port and Industrial Zone in Taweelah.

The scale of the project is impressive. The first of two phases will be completed in 2012, and comprises of an offshore har-bour of 2.7 km2, and an indus-trial zone (the Khalifa Port Indus-trial Zone, or KPIZ) of 51 km2. If all goes to plan, Industrial Zone B will add an astonishing 367 km2,

The fi rst phase of the ambitious Port Khalifa complex is set for completion in 2012. A great chunk of the utility contracts for the industrial zone has yet to be awarded.

Harbouring ambitions

SITE VISIT


The Emal smelter, which upon completion will be the world’s biggest, will initially be allocated 45 000 cubic meters per hour, rising to 60 000 once the second stage of the project is complete.

In total, the seawater cool-ing system will have a capac-ity of 143 000 cubic metres per day. While the system has been designed, the piping for the rest of the industrial zone has not been constructed yet, as the final structure depends on the require-ments of the tenant industries.

Once the industrial zone becomes operational, and the

the equivalent of 45 875 football pitches, by 2030.

“Abu Dhabi Ports Company plays a fundamental part in the diversification of the UAE’s economy,” says ADPC chief executive officer Tony Douglas. “The Khalifa Port and Industrial Zone particularly will be impor-tant in presenting a breadth of opportunities in line with the Abu Dhabi 2030 strategy.”

Work on the project is in full swing. So far, the construction of the harbour area has been given

“The KPIZ will be important in presenting a breadth of opportunities in line with the

Abu Dhabi 2030 strategy.”Tony Douglas, CEO ADPC

• PIPING (DIFFERENT SIZES) 246 KM• CABLES (33KV AND 11KV) 126 KM• SUBSTATIONS (33KV /11KV) 13

UTILITY REQUIREMENTS FOR KPIZ AREA A

metres of to raise the ground level in Area A by 2.5msl.

SEAWATER COOLINGOne of the big advantages of locating the industrial zone on the coastline is the ready access to seawater, which can be used for cooling purposes. The KPIZ already has its first tenant, with the Emirates Aluminum (Emal) swelter close to completion. This heated customer would not be able to function without the provi-sion of cooling water.

To harness the cool of the sea, a 1.7 kilometre canal has been constructed. A slender funnel narrowing from 80 meters at the opening to 45 metres at the base, the structure supplies an inner basin through 2.6 meter pipes that are fed by culverts taking in water at four meters deep, the optimal depth.

outflows increase beyond a cer-tain point, the ADPC will need to ensure that the used water does not restrict the cooling and water needs of the adjacent Taweelah IWPP power and desalination plant. To this end, the outflows, which contain high saline levels and can change the temperature levels of the sea around it, will have to be channelled further out to sea. “We might provide pipes on the seabed, to a dif fuser that dif fuses water into the sea a fur-ther 1.5 kilometres on top of the existing three kilometres. That would be the same distance as the offshore harbour,” says Jurjen Groen, ADPC project manager of the industrial zone.

UTILITIESAs the groundwork for the proj-ect progresses apace, the ADPC has started to focus on the utili-ties infrastructure needed to ser-vice a major harbour and indus-trial park.

In March, Larsen and Toubro began works for the design, con-struction, testing and commission-ing of an electrical, medium volt-age power supply for Phase 1A of the port.

The company’s primary role was to install a 33kV power cable network and three 33kV / 11kV primary substations to provide the main power supply throughout the industrial zone.

Meanwhile, Ed Zublin AG and Al Jaber Transport and General Contracting will be responsible for implementing the site-wide utilities infrastructure, includ-ing all of the major electrical, drainage, sewage and potable water networks.

the most attention by the devel-oper. Set on an artificial island, 4.5 kilometres from the mainland, it will provide a gateway for UAE imports and exports. By 2012, it will have a capacity of two mil-lion TEUs and nine million tonnes of general cargo compared with 650,000 and 7.5 million at Mina Zayed respectively. By 2030, the aim is to have increased capacity to 15 million TEUs and 35 million tones of general cargo.

Ongoing work includes the shifting of earth from Zone B to Zone A. Al Jaber Transport and General Contracting, and Ghan-toot Transport and General Con-tracting Establishment were con-tracted to move 40 million cubic Tony Douglas, CEO ADPC.

SITE VISIT


IN THE PIPELINEAt the time of writing, the ADPC is in the process of procuring key utilities infrastructure con-tracts for the first part of the industrial zone.

Area A will be divided into three packages, to be awarded separately. The packages include all core infrastructure work, ranging from roadwork, sewage systems to sea water cooling.

“We are currently in the pro-cess of procuring the contracts for the primary road, infrastruc-ture and utilities works in area A,” says Groens. “So that basically involves work on the roads, util-ities, sewage, sea water cooling, and telecoms systems in the pri-mary corridors. We have divided the area into three parts and will be awarding three separate pack-Tony Douglas says KPIZ will be important in presenting a breadth of opportunities in line with Abu Dhabi’s 2030 strategy.

SITE VISIT


ages, although the contracts will be fairly general in terms of the work involved.”

“We are still going through the bidding stage so we cannot say anything about the costs of the contracts. This will be announced within the next few months,” adds Groens.

The company has committed a total of AED 26.5 billion to Phase A of the project, which encom-passes the construction of the first phase of the harbour, and the industrial Area A. Of this, around AED 13 billion will be spent on the construction of the port. So far, only AED 8 billion already committed and another AED 18.5 billion worth of contracts yet to be awarded.

The ADPC hopes to have a clearer idea about the seawater cooling by mid November, when it will have worked out a phasing plan for the industrial zone. The zone will be populated by indus-try only gradually, with dif ferent types of industry having dif ferent cooling requirements.

The industrial zone will be divided into seven clusters, most of which will be mixed to strike a balance between downstream and upstream industries.

In July, the plans for the pet-rochemical cluster were thrown into disarray when the Abu Dhabi National Chemicals Company (ChemaWEyaat) announced it would not serve as the anchor tenant in the KPIZ, looking instead to establish a chemi-cal complex in Ruwais, closer to

an oil refinery that provides its energy feedstock.

For the rest of the infrastruc-ture, more certainty exists. The area will need a total of 246km of piping of various sizes, 126 km of cabling, for 33kV and 11kV and a total of 13 33kV / 11kV low volt-age substations. The harbour will require a total of 33 low volt-age substations. To cater for the whole complex, Transco has already built a high voltage substation transforming 220kV into 33kV. Once the transmission and distribution and water infra-

“We are currently in the process of pro-curing the contracts for the primary road, infrastructure and utilties in work area A.”

Jurjen Groens, ADPC project manager for the KPIZ

structure has been completed, it will be handed over to the Abu Dhabi Water and Electricity Authority (Adwea) by the ADPC. The authority will then be respon-sible for maintaining the infra-structure, for servicing the indus-trial customers. Adwea estimates that the project requires a capac-ity of around 750MW, accord-

The seawater cooling channel extending out into the sea.

The site of a future substation in the harbour area.

ing to an ADPC spokesman. This would be sufficient to power the port infrastructure, industrial zone infrastructure, construc-tion, projected port tenants and projected industrial zone tenants.

Keen to see its project succeed, the ADPC will be hoping that maximum capacity will be needed sooner rather than later.

In Partnership with: Co-located: Organised by:

For free fast-track entry, pre-register online today: www.powerandwaterme.com/register

Water and Wastewater Treatment

INSIDER INTERVIEW


Can you outline your products and projects relating to renewable energy, water and power conservation?When I joined Waagner Biro Gulf in 2004, our CEO and I decided to develop a new division in Water, Energy and Environment Tech-nologies. By 2005, we were able to successfully treat wastewater by fi l-tering it through a reed bed. Since then, we have installed 20 reed bed systems at different locations in the Emirates and in Qatar.

We are now launching the TerraSave concept which com-bines different technologies: pho-tovoltaic (PV) and concentrated solar power (CSP), the cooling of these PV modules using treated wastewater, harvesting the reeds as biomass, and the storage of the solar power into batteries, so get-ting CO2 reduction results.

The TerraSave concept requires little energy, doesn’t pollute the atmosphere with CO2, doesn’t need skilled labour for the mainte-nance, can treat even heavy metals, can pass as landscaped area, and enables the trade with the green house gas certifi cates (CER’s). There is no sludge, and thus meth-ane, production, and we don’t need chemical additives.

f

Peter Neuschaefer, director of environment, water and energy in the Middle East for Waagner Biro Gulf, talks to UME about his environmentally friendly wastewater solutions

PEOPLE METERWastewater Potential

Since 2006 we are happy to have the UNESCO regional offi ce of the Middle East as an observer at our pilot project, a labour camp here in Dubai.

In 2009, we won the Qatar Today Green Innovation Award, proof that our TerraSave concept is fi nd-ing acceptance.

What is driving the demand for these solutions? Energy and Water savings. Basi-cally our solutions are common sense. Of course we have to prove the return of investment all the time, but this is not all about returns. It is also about the long term solution, about sustainability.

Is environmental con-sciousness a real factor in deci-sion making in the power and water sector?No, it is still the investment. I try to demonstrate the benefi ts of the low running costs and low maintenance costs of our concepts, which are maybe 70 percent less than conven-tional concepts. But unfortunately, running and maintenance costs are not appreciated by buyers, and are not considered as money sav-ings at tender phases or product offer stages.

Are households and busi-ness waking up to the need to conserve water and power resources?Yes, I see some changes, but it is still too early to say there is a big movement coming from the end consumer. So long as the govern-ment doesn’t change regulations and laws it is diffi cult for house-holds and businesses change their habits. Laws and regulations were the key driver in Europe in forcing anybody to have an environmental consciousness. But looking at the actual movements in terms of laws and regulation in the Emirates, I am sure it will come very soon.

Is a rising environmental consciousness translating into business opportunities for com-panies which supply environ-mentally friendly solutions?Yes it is. Green technologies are an engine for growth in many coun-tries. It drives scientists to create new innovations which can be used for new business opportunities.

When did you fi rst start perceiving environmental con-sciousness in the Middle East, and how did it manifest itself?I saw big changes in environmen-

tal consciousness in the last two years, let's say after the world wide economical downturn. For me this was a step to the right direction, as I came to the region in 1997 with the environment consciousness and awareness I had acquired in Europe. In the 1970s we had many environment disasters, and there was not enough fuel was available to drive a car on Sundays and so on. That changed the attitudes of people in Germany.

What more needs to be done by governments to affect change?The governments have been making the right decisions in the past years. We cannot expect young nations to change radically in a very short time. In Europe, we were at this point 30 years ago. But the Middle East can develop much faster than we did, because the mistakes made in Europe can be avoided here.

It is important for people to understand that promoting invest-ment into a sustainable building or city requires radical change. The government can implement the regulations to force this through, and to push these new technolo-gies. In the end the government

y his

INSIDER INTERVIEW


benefi ts through less maintenance and investments in municipalities.

Which countries are doing the most to promote energy effi -ciency and water conservation?From my point of view it is Ger-many and some other European countries. In recent years the US has pushed hard to successfully implement renewable energy and water reuse policies. In the Middle East I see a strong movement towards adopting environmen-tally friendly solutions. Estidama, a regulation for a green buildings implemented by the UAE authori-ties, provides standards and help. In addition, I would like to mention the Masdar project as a good exam-ple of a green development.

Which renewable and water conservation methods are best suited to the region?

If we look into the future we have to consider the fast growing popu-lation in these regions. Decentra-lised water and power generation and wastewater treatment can help meet this rising demand.

What technological break-throughs are we going to see in these fi elds in the coming years?I am looking at future green tech-nologies all over the world and I see decentralised sun powered energy (for air conditioning, for example) and natural wastewater treatment as the most effi cient technology for this region. They are much more

Waagner Biro Gulf have developed an integrated concept with TerraSave, which combines solar power generation with wastewater treatment.

As we are in a hot desert region, the things we have to consider most are the reuse of water and the lowest consumption of energy. But I believe that solutions focusing on the sun’s energy have a future: solar desalination; solar warm water pro-duction, energy storage, decentr-alised solar air. And so will energy storage, natural wastewater treat-ment, biomass production and nat-ural aquifers.

How important are renew-ables and water conservation to Middle Eastern countries trying to meet increasing demand for power and water?

energy effi cient as the conven-tional technologies.

Let take the example of district cooling technology which is one of the cheapest cooling concepts, but it is centralised. The problem we are faced with now is getting the billing for the service right. Every-body likes to know what he con-sumes on energy or water. If you are able to reduce your energy bill by saving energy, you like to see it at end of the month. But if you centra-lise a cooling technology, for exam-ple, environmental consciousness is not encouraged and the efforts of each consumer to save energy and water are undermined.

Peter Neuschaefer speaking in Dubai.

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PROJECTS


UTILITIES PROJECT TRACKERInformation is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.com

9023/9001 Underground Cables

Saudi Electricity Company (SEC) Al Fanar Contracting 46 project under

constructionPower Transmis-sion

380kV Transmission Line - North of Riyadh

Saudi Electricity Company (SEC)

KEC International / Al Sharif Group for Con-tracting & Development Trading

64 project under construction

Power Transmis-sion

Desalination Plant & Drinking Water Infrastructure Emaar Economic City,Saudi

Huta-Hegerfeld & Huta-Marine Limited Company

53 project under construction Desalination Plant

Desalination Plant in Jeddah - Phase 3

Saline Water Conversion Corporation (SWCC)

Kuljian Engineering Corporation

Doosan Heavy Indus-tries & Const. Company / Saudi Berkefeld Filter (Witco)


115kV Underground Cables in Madina 2nd Industrial City

Saudi Electricity Company (SEC) Siemens 35 project under


Salwa IPP Saudi Electricity Company (SEC) Not Appointed 290 project in concept

stage Power Plant

10J Substation & 101 Satel-lite Substation in Yanbu

Royal Commission for Jubail and Yanbu (RCJY) Arabia Electric Ltd. 150 project under

construction Substation

Princess Noura Bin Abdulrah-man University - High Volt-age Substation

Ministry of Higher Education / Ministry of Finance

ABB Contracting Co. / Al Fanar Contracting 167 project under


Yanbu IWPP

The Power & Water Utilities Company for Jubail & Yanbu (Marafi q)/Saline Water Con-version Corporation (SWCC)

Mohammed A.Turki Mott MacDonald

Not Appointed 4000 project under design

Power and Desali-nation Plant

Qsai Dam at Jizan Ministry of Water and Electricity,Saudi Arabia

Zuhair Fayez & Partners

Bin Jarallah Establish-ment for Trading & General Contracting (Bin Jarallah Group)

40 project under construction Dam

380/110/13.8-kV Substation Expansion in Al Aziziyah Area

Saudi Electricity Company (SEC) Siemens, Saudi 20 project under


Power Plant Expansion - Duba

Saudi Electricity Company (SEC)

Najm Al Jazirah for Trading Contracting & Agriculture Co.

120 project under construction Power Plant

King Abdullah Economic City (KAEC) - Power Grid Package Emaar Middle East Properties Siemens 400 project under


Power and Water Plant in Ras Al Zour

Saudi Arabian Mining Com-pany (Maaden) / Rio Tinto Alcan

Not Appointed 2500 EPC Bid Power & Desali-nation Plant

New Dam in Abha Ministry of Water and Electricity

Zuhair Fayez & Partners

Bin Jarallah Establish-ment for Trading & General Contracting (Bin Jarallah Group)

16 project under construction Dam

Substations 9024 and 8183/8184

Saudi Electricity Company (SEC) ABB Contracting Co. 120 project under


Interim Power & Desalination Plant at Yanbu

The Power & Water Utilities Company for Jubail & Yanbu (Marafi q)

Jacobs Engi-neering Not Appointed 900 EPC Bid Power & Desali-

nation Plant

Rabigh IPP - 380-KV Substa-tion

Saudi Electricity Company (SEC); ACWA Power Interna-tional; Korea Electric Power Corporation (Kepco);

ABB Contracting Co., Saudi Arabia 48 project under


MIDDLE EAST

Project Title Client Consultant Main Contractor

Value / Value Range (US$. Mn) Project Status Project Type

SAUDI ARABIA

PROJECTS


UAE

Hassyan Complex - Station P Dubai Electricity and Water Authority (DEWA)

Mott Mac-Donald Not Appointed 3000 EPC Bid Power and Desali-

nation Plant

Installation of 11 kV Cables Dubai Electricity and Water Authority (DEWA)

Power Magic Electrical Works 3 project under


Fujairah 2 (F2) IWPP ADWEA/ Marubeni Corpora-tion/ International Power Fichtner Alstom Power / Sidem 3,000 project under

constructionPower and Desali-nation Plant

Desalination Plant near Hamriyah Free Zone

Sharjah Electricity and Water Authority (SEWA)

Aqua Engineering, Techton Engineering & Construction


General Utility Plant Expan-sion at Ruwais

Abu Dhabi Oil Refi nery Com-pany (Takreer)

SK Engineering & Construction Company, Abu Dhabi


Upgrade of Irrigation Net-works and Pumping Stations

Department of Municipalities & Agriculture-Abu Dhabi Not Appointed 10 EPC Bid Pumping Station

Nuclear Power Plant in Abu Dhabi

Abu Dhabi Water and Elec-tricity Authority / Emirates Nuclear Energy Corporation

Korean Electric Power Company / Hyundai En-gineering & Construc-tion Company/Samsung C & T Corporation/ Doo-san Heavy Industries


Installation of 11kV Cables in Dubai

Dubai Electricity and Water Authority (DEWA) Econ Contracting LLC 25 project under


Two Desalination Plants in Ajman

Federal Electricity & Water Authority (FEWA)

Tecton Engineering & Construction / Aqua Engineering;


KUWAIT

11kV Overhead Transmission Line for Subiya Road

Ministry of Electricity & Water (MEW), Kuwait

National Contracting Company (NCC), Kuwait 11 project under


New Substations in Kuwait Ministry of Electricity & Water (MEW), Kuwait Not Appointed 30 EPC Bid Substation

Water Storage Tanks in West Funaitees

Ministry of Electricity & Water (MEW), Kuwait Not Appointed 500 EPC Bid Water Distribu-

tion

Shuwaikh Desalination Plant Ministry of Energy (Electricity & Water)

Doosan Heavy Indus-tries & Construction Kuwait


QATAR

Solar Power PlantQatar General Electricity & Water Corporation (Kahra-maa)

Not Appointed 1000 Feasibility Study Power Plant

Qatar Power Transmission System Expansion - Phase 9

Qatar General Electricity & Water Corporation (Kahra-maa)

Energo-projekt Entel, Qatar

Hyosung Group / Siemens 1500 project under


Reverse Osmosis Desalina-tion Plant Pilot Project

Qatar General Electricity & Water Corporation (Kahra-maa)

Energo-projekt Entel, Qatar

Not Appointed 125 project under design Desalination Plant

OMAN

Power Plant in the Duqum Area - Phase 1

Rural Areas Electricity Company

Global Chemicals & Maintenance Systems 35 project under

construction Power Plant

Salalah IWPP

Oman Power and Water Procurement Company /Sem-bcorp Utilities Pte Ltd /Oman Investment Corporation

Shandong No.3 Electric Power Construction Corporation,China

750 project under construction

Power and Desali-nation Plant

132/33 kV Grid Station at Muttrah

Oman Electricity Transmission Company (OETC)

Galfar Engineering & Contracting, Oman 22 project under


BAHRAIN

Independent Water and Power Plant in Addur

Ministry of Finance / Ministry of Electricity & Water / Suez Energy International

Mott Mac-Donald

Degremont / Hyundai Heavy Industries (HHI) 4000 project under

constructionPower and Desali-nation Plant

Durrat Al Bahrain - Desalina-tion Plant Durrat Khaliji Bahrain Energy Central 22 project under

construction Desalination Plant

Note : The above information is the sole property of Ventures Middle East LLC and cannot be published without the expressed permission of Ventures Middle East LLC, Abu Dhabi, UAE

TENDERS


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

CONSTRUCTION OF TRANSFORMER WORKSHOP TO SEEB AND ALMABELAIssuer: Muscat Electricity Distribution Co. (SAOC)Tender no: 251/2010Title: Construction of Transformer Workshop to Seeb and AlmabelaDescription: The scope of work includes construction of transformer workshop to Seeb and Almabela.Bond: N/ATender fee: 185.00 OMR Closes: Sep 6, 2010Contact: www.tenderboard.gov.om

UNDERGROUNDING EXISTING HT & LT O/H LINES INTO CABLES AT MUSCAT AREAIssuer: Muscat Electricity Distribution Co. (SAOC)Tender no: 249/2010Title: Undergrounding Existing HT & LT O/H Lines into Cables at Muscat AreaDescription: The scope of work includes undergrounding existing HT & LT O/H Lines into cables at Muscat Area in Zone 1.Bond: N/ATender fee: 1080.00 OMR Closes: Sep 6, 2010Contact: www.tenderboard.gov.om

UNDERGROUNDING EXISTING HT & LT O/H LINES INTO CABLES AT SIDHAB AREAIssuer: Muscat Electricity Distribution Co. (SAOC)Tender no: 248/2010Title: Undergrounding Existing HT & LT O/H Lines into Cables at Sidhab AreaDescription: The scope of work undergrounding existing HT & LT O/H Lines into Cables at Sidhab Area in Zone 1.Bond: N/ATender fee: 1285.00 OMR Closes: Sep 6, 2010Contact: www.tenderboard.gov.om

CONSTRUCTION OF 225 SECONDARY SUBSTATIONS IN SEVERAL AREAS OF KUWAITIssuer: Central Tenders CommitteeTender no: MEW/121/2009/2010Title: Construction of 225 Secondary Substations in

Tender activityVisit constructionweekonline.com for the latest tender information

To add a tender to our listing, email details to lutfi [email protected]

Several Areas of KuwaitDescription: The scope of work includes construction of 225 secondary substations in several areas of Kuwait.Bond: ApplicableTender fee: 2000.00 KWD Closes: Sep 12, 2010Contact: Central Tenders Committee - Ministry of Electricity & Water

CONSTRUCTION OF DESALINATION PLANTIssuer: Public Authority for Electricity and WaterTender no: 244/2010Title: Construction of Desalination PlantDescription: The scope of work includes construction of desalination plant in Al Awaifiya - Wilayat Bahla. The contract also includes operation & maintenance for three years.Bond: ApplicableTender fee: 350.00 OMR Closes: Sep 13, 2010Contact: www.tenderboard.gov.om

THE OVERHAUL OF THE TURBINE AND GENERATOR AND PROMPTER NO. 2Issuer: Saline Water Conversion Corporation (SWCC)Tender no: KH/5314Title: The Overhaul of The Turbine and Generator and Prompter No. 2Description: The scope of work includes providing the overhaul of the turbine and generator and prompter No. 2.Bond: N/ATender fee: 500.00 SARCloses: Sep 19, 2010Contact: www.swcc.gov.sa

REPLACEMENT OF FIVE TURBINE CONDENSATE PUMPSIssuer: Saline Water Conversion CorporationTender no: JD/RM/579Title: Replacement of Five Turbine Condensate PumpsDescription: The scope of work includes replacement of five turbine condensate pumps & their canisters for Steam Turbines Units at Phase-4 of Jeddah Power Plant.Bond: N/A

Tender fee: 500.00 SARCloses: Sep 19, 2010Contact: www.swcc.gov.sa

INSTALLATION OF DESALINATION UNIT IN AL ZOUR SOUTHERN IWPPIssuer: Central Tenders CommitteeTender no: MEW/14/2010/2011Title: Installation of Desalination Unit in Al Zour Southern IWPPDescription: The scope of work includes supplying, installation and commissioning of desalination unit in Al Zour Southern IWPP.Bond: ApplicableTender fee: 4000.00 KWD Closes: Sep 19, 2010Contact: Central Tenders Committee - Ministry of Electricity & Water.

REFURBISHMENT OF WATER STORAGE TANKS AND WATER TOWERS IN KUWAITIssuer: Central Tenders CommitteeTender no: MEW/111/2009/2010Title: Refurbishment of Water Storage Tanks and Water Towers in KuwaitDescription: The scope of work includes refurbishment of water storage tanks and water towers in Kuwait.Bond: ApplicableTender fee: 500.00 KWD Closes: Sep 19, 2010Contact: Central Tenders Committee - Ministry of Electricity & Water

OVERHAULING OF 19 MEDIUM VOLTAGE MOTORS OF YANBU PLANTIssuer: Saline Water Conversion Corporation (SWCC)Tender no: YM/R/PE/137Title: Overhauling of 19 Medium Voltage Motors of Yanbu PlantDescription: The scope of work includes overhauling of 19 medium voltage motors of Yanbu Plant.Bond: N/ATender fee: 500.00 SAR Closes: Sep 20, 2010Contact: www.swcc.gov.sa

TENDERS

September 2010 ● Utilities Middle East 45www.utilities-me.com

INSTALLATION OF FIBRE CEMENT / GLASS REINFORCED EPOXY TRANSMISSION PIPELINESIssuer: Dubai Electricity & Water AuthorityTender no: CW/0064/2010Title: Installation of Fibre Cement / Glass Reinforced Epoxy Transmission PipelinesDescription: The scope of work includes supply, installation, testing & commissioning of fibre cement / glass reinforced epoxy transmission pipelines to protect / divert under existing services and associated works at various locations in the Emirate of Dubai.Bond: ApplicableTender fee: 500.00 AED Closes: Sep 20, 2010Contact: www.dewa.gov.ae

REPLACEMENT OF 0.433/11-KV SUBSTATIONIssuer: Central Tenders CommitteeTender no: MEW/12/2010/2011Title: Replacement of 0.433/11-kV SubstationDescription: The scope of work includes replacement of 0.433/11-kV substation.Bond: ApplicableTender fee: 2500.00 KWD Closes: Sep 21, 2010Contact: Central Tenders Committee - Ministry of Electricity & Water.Tender Category: Power & Water

BOILER INSPECTION PLANIssuer: Saline Water Conversion CorporationTender no: JD/R/M/394Title: Boiler Inspection PlanDescription: The scope of work includes providing specialized services to carry out the “Boiler Inspection Plan” and “Life Evaluation Program” of Boiler Unit #13 at Jeddah Ph-4 Plant.Bond: N/ATender fee: 500.00 SAR Closes: Sep 22, 2010Contact: www.swcc.gov.sa

CONSTRUCTION OF 380-KV RAS AL-ZOUR SUBSTATIONIssuer: Saline Water Conversion Corporation (SWCC)Tender no: RAZ-SubS-380KVTitle: Construction of 380-kV Ras Al-Zour SubstationDescription: The scope of work includes design, supply and construction of 380-kV Ras Al-Zour Substation.Bond: N/ATender fee: 50000.00 SAR Closes: Sep 22, 2010Contact: www.swcc.gov.sa

PRE-CONTRACT DESIGN SERVICES FOR NEW AL SHAMAL SEWAGE TREATMENT WORKS (STW) Issuer: Public Works AuthorityTender no: PWA/ITC/007/10-11

CONSTRUCTION OF YANBU POWER AND DESALINATION PLANT - PHASE 3Saudi Arabia’s Saline Water Conversion Corpora-tion (SWCC) has issued a tender for the Phase 3 of the Yanbu power and desalination plant. The project involves the design, engineering, con-struction, commissioning and testing of a new dual purpose power and desalination plant and associated facilities with capacities of oil-fired 1,700 MW net power output and 550, 000 cubic meter water production. The Project will be locat-ed within SWCC’s boundary in the south of the existing power and desalination plants in Yanbu area on the western coast of Saudi Arabia.The deadline for submissions is September 22, and the tender fee is 200000.00 SAR. Further details can be found on the corporation’s web-site: www.swcc.gov.sa

KEY CONTRACT

Title: Pre-Contract Design Services for New Al Shamal Sewage Treatment Works (STW)Description: The scope of work includes providing pre-contract design services for New Al Shamal Sewage Treatment Works (STW).Bond: ApplicableTender fee: 750.00 QAR Closes: Sep 26, 2010Contact: Fax: 00974 4950777, Contract Dept., Public Works Authority

CONSTRUCTION OF 9 TOWERS FOR FRESH WATER AND ANNEXED WORKS AT SABAH EL-AHMED CITYIssuer: Central Tenders CommitteeTender no: MEW/98/2009/2010Title: Construction of 9 Towers for Fresh Water and Annexed Works at Sabah El-Ahmed CityDescription: The scope of work includes construction of 9 towers for fresh water and annexed works at Sabah El-Ahmed City.Bond: ApplicableTender fee: 2000.00 KWD Closes: Sep 26, 2010Contact: Central Tenders Committee - Ministry of Electricity & Water.

RELOCATION OF DOHA SOUTH SEWAGE TREATMENT WORKSIssuer: Public Works AuthorityTender no: PWA/ITC/008/10-11Title: Relocation of Doha South Sewage Treatment WorksDescription: Ashghal intends to relocate Doha South Sewage Treatment Works (STW) to another site about 25 kilometers away from the present location. A new site has been identified and some investigations have already been carried out during CP 734/1 project “Abu Nakhla Lagoon Diversion Transmission Pipeline”. The purpose of this study is to carry out detailed geotechnical studies required for designing and construction of treatment works at the new site.Bond: ApplicableTender fee: 750.00 QAR Closes: Sep 26, 2010Contact: www.ashghal.gov.qa

REHABILITATION OF BOILER (A) AT AZIZIAH PLANTIssuer: Saline Water Conversion Corporation (SWCC)Tender no: AZ/R/M/041Title: Rehabilitation of Boiler (A) at Aziziah PlantDescription: The scope of work includes rehabilitation of Boiler (A) at Aziziah Plant.Bond: N/ATender fee: 500.00 SAR Closes: Sep 26, 2010Contact: www.swcc.gov.sa

PROVISION OF TEMPORARY POWER GENERATION SERVICES TO OMAN MAIN INTERCONNECTED SYSTEMIssuer: Oman Power &Water Procurement CompanyTender no: 272/2010Title: Provision of Temporary Power Generation Services to Oman Main Interconnected SystemDescription: The scope of work includes provision of temporary power generation services to Oman Main Interconnected System.Bond: N/ATender fee: 3000.00 OMR Closes: Sep 27, 2010Contact: www.tenderboard.gov.om

CONSTRUCTION OF 11/132/400-KV AL FUNAITEES SUBSTATIONIssuer: Central Tenders CommitteeTender no: MEW/76/2009/2010Title: Construction of Al Funaitees SubstationDescription: The scope of work includes construction of 11/132/400-kV Al Funaitees Substation.Bond: ApplicableTender fee: 3000.00 KWD Closes: Oct 10, 2010Contact: Central Tenders Committee - Ministry of Electricity & Water

UPCOMING EVENTS


Upcoming conferences and exhibitions

Saudi Water & Power ForumJeddah, Saudi Arabia3-6 October 2010Jeddah Hilton

Contact: Shunker Goel +44 20 7978 0080 [email protected]

Website: www.ksawpf.com/

Power-Gen Middle EastQatar International Exhibition CentreDoha, Qatar4-6 October 2010

Contact: WorldwideKelvin Marlow

44 (0)1992 656 610 [email protected]

USBridgett Morgan

+1.918.831.9130 [email protected]

Website: www.power-gen-middleeast.com

Power Generation and Water Middle EastAbu Dhabi, UAE17-19 October 2010 Abu Dhabi National Exhibition CentreContact: Anita Mathews

+971 4 335 3526 [email protected]

Website: www.powerandwaterme.com

Iraq Mega ProjectsIstanbul, Turkey26-28 OctoberIstanbul HiltonWebsite: http://www.cwcimp.com

Gulf SolarAbu Dhabi, UAE23-24 November 2010Sheraton Hotel

Contact: 44 (0)207 099 0600 [email protected]

Website: www.greenpowerconferences.com

Arab Water WeekAmman, Jordan5-9 December 2010Le Meridien Hotel

Contact: + 9626 4642501/2/3 [email protected]

Website: www.arabwaterweek.org

Electricity Middle EastDubai, UAE8-10 February 2011Dubai International Exhibition Centre

Contact: Anita Mathews 971 4 407 2472

[email protected]: www.middleeastelectricity.com

er 2010

SNAPSHOT: BAHRAIN


Once fully operational, the Al Dur independent water and power project will be Bah-rain’s single biggest source of electricity and desalinated water. Located on the king-dom’s southeastern coast, the plant will have a capacity of 1,245MW and 191 million im-perial gallons per day (MIGD) by June 2011. According to media reports, the plant be-gan commercial operations in June this year, with an initial 400MW and 48 MIGD com-ing online. The projects was awarded as a build, own and operate (BOO) contract to a consortium comprising of French power generation com-pany GDF Suez and the Gulf

Investment Corporation (GIC), an organisation promoting infrastructure development in the region. They constitute the Al Dur Power and Water Company, which be respon-sible for running the plant. Both partners initially had an equal 50:50 stake in Al Dur. Following the sale of 30 per-cent of their stakes to a group of investors from Bahrain, GIC now holds a 25 percent stake in Al Dur and GDF Suez is the largest stakeholder, with 45 percent. Hyundai Heavy In-dustries has been tasked with constructing the complex. BNP Paribas, Freshfi elds Bruckhaus Deringer and Mott MacDonald are advisors to the project.

BAHRAIN’S POWER HOUSE – THE AL DUR IWPP

Bahrain is in need of new sources of power as well as upgraded and new power networks

as it strives to meet the demands placed on by a growing economy and expanding population. This was made abundantly clear in July, when energy consumption reached a record 2,650MW, according to the Bahrain Tribune, as temperatures soared beyond 40 degrees Celsius.

Bahrain had 2.3 gigawatts (GW) of installed electricity genera-tion capacity in 2007, according to estimates by Business Monitor International (BMI), all of which coming from conventional thermal sources. An estimated 9.2 billion kilowatthours (KWh) of electricity was generated in 2006, an increase from 8.2 billion in 2005. There are currently no exports of electricity and no imports. Bahrain is now con-nected to the GCC Interconnection

the Al Dur independent power and water project (IWPP) will be the Kingdom’s largest electricity and desalination plant and will be operated on a built, own and oper-ate (BOO) basis by GDF Suez and the Gulf Investment Authority (see boxout)

According to media reports, Bahrain was seeking a US$1.3 bil-lion infrastructure loan to fi nance

GrowingBahrain The island Kingdom has turned to public private partnerships to power its economic expansionThe part

Estimated installed electricity generation capacity in 2007Source: BMI

2.3 Gigawatts Grid, however, which will enable it to tap electricity from other coun-tries, as well as participating in a future regional energy market.

The Ministry of Electricity and Water (MEW) anticipates annual growth in electricity consumption of seven percent each year for the next decade or so. The authori-ties are encouraging independent power plants (IPPs) to operate and they have also privatised some state power assets. Bahrain is one of the few countries in the Middle East that has laid the regulatory framework for the privatisation of the power generation industry, say experts.

The private sector has already contributed to the electricity and water sector in Bahrain through the construction of Bahrain’s fi rst IPPs, Al Ezzel, and the enlargement of Al Hidd power and water station.

When fully operational in 2011,

power and water projects in 2009. Of this total, $850 million will be allocated to add energy projects to the national grid between 2009 and 2014. Under the plans, Bah-rain is looking to build 10 new power stations and expand four others, as well as adding 380 kilo-metres in underground cables. The remaining funding will be used to upgrade Bahrain’s water network.

DESALINATED WATER OUTPUT, IN MILLION GALLONS

SNAPSHOT: BAHRAIN


data supplied by Aquastat, a division of the UN’s Food and Agricultural Organisation.

Because of Bahrain’s size, the challenges it is facing in its water sector are easier to respond to than in larger neighbouring states, such as Saudi Arabia. According to Aquastat, total water withdraw-als per capita increased by 14 per-cent between 2002 and 2007, equal to the rate of growth of the popula-tion over the same period. As the population remains small, with less than a million people, a well planned investment strategy in the water sector can cater for the country’s needs relatively easily. According to IMF data, the population will reach 920,000 in 2012, up from 830,000 today. It should be noted that the industrial sector has increased its share of water consumed in the country, chipping away at agricul-

WATERBahrain makes much use of desali-nated water and major investments are planned to increase production from the current 143 million gallons per day, to 200 million gallons per day in 2011. New transmission sys-tems and storage facilities will also be built. In the waste water sector, production will reach 164,250 cubic meters annually by 2015, up slightly from the current 163,000 cubic meter annual capacity, according to

ture’s share. As economic growth rises, the industrial sector demand is also anticipated to rise.

In 2008, Bahrain’s Electricity and Water Authority signed a Memoran-dum of Understanding (MoU) with Singapore’s National Water Agency (PUB). The two agencies will col-

According to the UN Economic and Social Commission for Western Asia, Bahrain had the fasted growing economy in the Arab world in 2006, with the country benefi tting from its oil reserves and a burgeoning fi nancial industry. In 2008, Bahrain was named the world’s fastest growing fi nancial center by the City of London’s Global Financial Services Index. Petroleum production and processing account for around 60 percent of export receipts, and 30 percent of gross domestic product. Business Monitor International estimates that the country’s nominal GDP stood at US$19.20bn in 2008. Bahrain was at-tested to be the freest economy in the Middle East in the 2006 Index of Economic Freedom.

It is no exaggeration to say that Bahrain is currently going through its most exciting E&P phase in more than seven de-cades. Four offshore exploration and production sharing blocks have been allocated, and drilling commenced this year. Onshore, new depths are being plumbed to discover natural gas, and a host of enhanced oil recovery techniques are to be deployed to stem decline and increase production at the country’s 77-year old Bahrain Field.The shift from a sedate, almost forgotten upstream hamlet, into a thriving hotbed of activity has been expedited and made pos-sible by a dramatic overhaul of the energy business in Bahrain. The National Oil and Gas Authority was born when three minis-tries with overlapping and blurred boundaries were streamlined into one body by Royal Decree in 2005, a sea change which the current fl urry of activity can be attributed to.Bahrain shares an offshore fi eld called Abu Saafa with Saudi Arabia. It is estimated that this produces some 300 000 barrels per day, which is split 50:50. The product from Abu Saafa is sold directly as crude on international spot markets, and does not come to Bahrain.Occidental Petroleum Corporation and Mubadala Oil & Gas, are working jointly on a development and production sharing agreement with the National Oil and Gas Authority of Bahrain (NOGA) for the further development of the Bahrain Field. Under this agreement, a Joint Operating Company was formed to serve as operator for the project under the DPSA.Oil production from the Bahrain fi eld is expected to more than double to approximately 75 000 barrels per day within fi ve years, and grow to a peak level of more than 100 000 barrels per day

thereafter. Gas production capacity is expected to grow from the current level of 1.7 billion cubic feet per day to over 2.5 billion cubic feet per day under the Field development plan. Oxy’s net share of production is expected to be approximately 28,000 bar-rels of oil equivalent per day (BOEPD) in 2010 growing to 56 000 BOEPD within fi ve years. Mubadala’s net share of production is expected to be 18 500 BOEPD and 37 000 BOEPD for the same time periods. Net reserve additions over the life of the project for Oxy are said to be 450 million barrels of oil equivalent.

BAHRAIN’S ECONOMY AT A GLANCE

UPSTREAM ENERGY PROJECTS

laborate on the operation and main-tenance of water supply, and the design and construction of waste water treatment systems. This part-nership will create opportunities for Singapore’s own water companies, such as Hyfl ux and Darco, to enter Bahrain’s water sector.

Bahrain hopes to increase production from its ageing oilfi elds by more than 100% by 2020.

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Utilities Middle East - Sept 2010

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