Middle East
ESSENTIAL INSIGHTS FOR MIDDLE EAST WATER, GAS AND ELECTRICITY YP PROFESSIONALS RO R OFE FESS SSIO IONALS
January 2010
• Vol 4. Issue 1
THE GENERATOR GAME Trends in the generators and compressors market
GAS CITIES IN FOCUS
ANDREW SCOBLE, MWH DIRECTOR OF OPERATIONS (MIDDLE EAST)
A new concept that h could ld offer economic stability
CALLING THE SHOTS MWH Global’s regional head talks candidlyy about his firm’s future plans
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PREVIEW: THE WORLD FUTURE ENERGY SUMMIT 2010, ABU DHABI Your guide to one of the biggest events of the year, taking place this month ITP Business Publication An An ITP Business Publication
CONTENTS
January 2010 Issue 1
10
2 COMMENT Worldwide cleantech financing has tanked recently.
4 REGIONAL UPDATE A round-up of some of the biggest headlines in the region.
9 WEB UPDATE The latest news from Utilities Middle East’s dedicated website.
10 NEWS ANALYSIS One global agency is aiming to help the Gulf’s pollution problems.
Former IDA president Lisa Henthorne
Delegates at WFES 2009
19 12
12 INTERVIEW MWH Global has diversification and expansion on its agenda.
16 GAS CITIES A new concept has the potential to create economic stability, says Crescent Petroleum’s Badr Jafar.
19 EVENT PREVIEW The World Future Energy Summit takes place in Abu Dhabi later on this month.
23 THE GENERATOR GAME Trends in the regional generators and compressors market. The Jebel Ali STP
23
27 PIPE SECTOR FOCUS Victaulic senior product engineer David Hudson takes a look at circuit balancing.
28 PROJECT TRACKER A select list of current regional utilities projects.
30 TENDERS Opportunities available in the Middle East.
Aggreko Middle East MD Phil Burns
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Brush Transformers Gulf’s Manu Domen
32
32 PEOPLE METER Brush Transformers Gulf’s Manu Domen outlines how his firm will beat the recession.
January 2010
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Utilities Middle East 1
COMMENT Middle East
Back on the agenda Worldwide cleantech financing has tanked recently
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WFES 2010 represents a great opportunity for a sector that has suffered due to the credit crunch.
T
he departure of Rio Tinto, one of the world’s biggest mining firms, from a joint venture with oil supermajor BP to investigate the use of hydrogen power generation using gas as a feedstock has raised a few eyebrows. Both companies signed a deal with Masdar to create a generating plant that would have 400MW of capacity, and which would capture around 1.7 million tonnes a year of carbon emissions using CCS technology. On the surface of it, it hasn’t been considered a seismic move; Rio Tinto said it was still going ahead with a similar project, also with BP, in California, the only difference being that coal – a commodity with which the Australian giant is of course inextricably linked – is the feedstock, and not natural gas. A senior Rio Tinto executive told media that while the Abu Dhabi project was ‘ground-breaking and important’, the company preferred to focus on techniques that involve solid feedstocks. This all seems a bit strange. If Rio Tinto wasn’t interested in focusing on natural-gas feedstock techniques, then why on earth did it sign up for the venture in the first place? It may add a positive spin on matters to indicate that you are focusing on other CCS projects, but the fact remains that
Rio Tinto seems to have wanted the funds from its 50% share in the venture – which was bought out by BP for an undisclosed sum – rather more than any actual involvement with the enterprise. From the wider perspective, a shift away from investing in clean energy has already been noticed by one leading international business magazine, which pointed out in early December how the strategies of leading companies like Shell had changed. The high start-up costs associated with this kind of technology have been hit particularly badly by the credit crunch, as banks with a strong history in providing finance for cleantech projects have suffered the most. However, with the World Future Energy Summit taking place in Abu Dhabi this month, there is a great opportunity for financiers and investors to get back on the cleantech bandwagon. More liquidity in the financial markets spells good news for some of the major Middle Eastern initiatives, all of which have a laudable goal to diversify their electricity-generating feedstocks away from a dependance on traditional oil and gas. I look forward to seeing you there.
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REGIONAL UPDATE
Revised bids for UAE nuclear deal The final bids for the US$40 billion UAE nuclear power plants contract were submitted last week, with revisions from the French and US teams thought to bring the cost of their bids down towards that of the South Korean consortium. A government official, speaking on condition of anonymity to the National daily, confirmed that the French consortium, consisting of EDF, GDF Suez and Total, had submitted a new bid. Another team, which is made up of GE and Hitachi has also submitted a revised bid. The lowest bid was initially submitted by Korea Electric Power, Hyundai and Samsung, which has leveraged diplomatic intervention to support its bid. The South Korean foreign minsister, Yu Myung-hwan, met with UAE Crown Prince Sheikh Mohammad bin Zayed Al Nahyan during a regional visit earlier this month, where he promoted the competence of Korean plants, according to the Korea Times newspaper. The French team also has strong
Image Corurstey of Getty
Final submissions from French and US/Japanese teams as race for $40bn contract concludes
French President Nicolas Sarkozy met UAE Crown Prince Sheikh Mohammad bin Zayed Al Nahyan in May this year.
diplomatic support, with French President Nicolas Sarkozy making a trip to the UAE to speak with the Crown Prince earlier this year.
The Korean consortium is considered to be a “surprise contender” according to the paper, due to its price offer and construction capacity.
It is thought that the massive contract will be awarded either at the end of this month or early next year.
Corodex finishes Saudi Arabia’s ACWA buys 58% stake in Barka 1 3 Abu Dhabi STPs Saudi Arabia’s ACWA Power Inter- Barka 1 has a capacity of 456MW but other bidders for the plant Corodex Industries has completed three sewage treatment plants (STPs) for Abu Dhabi Sewerage Services Company (ADSSC). Two plants have been built in Mafraq (50,000 cubic metres and 30,000 cubic metres a day), with the third in Al Ain (15,000 cubic metres a day). Two of the plants will use membrane bioreactor (MBR) technology, while the remaining facility will employ sequential batch reactor (SBR) technology.
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January 2010
national has staved off bids from 10 developers to take a 58% stake in the Barka 1 power and water plant in Oman.
and 91,000 cubic metres of desalinated water. The company has not given an indication to the size of the deal,
4.3 million Amount of extra capacity, in cubic metres, added to the global desalination market during 2009 See story on page 10
included Kahramaa and TAQA. “This now gives us the first asset outside Saudi Arabia, we want to become global,” said ACWA CEO Paddy Padmanathan, according to the Reuters news agency. ACWA has also submitted bids for the larger Barka 3 and Sohar 2 IWPPs, both of which are based in Oman. Padmanathan estimated the total cost of both facilities at US$2 billion, with separate capacities of 750MW. www.utilities-me.com
REGIONAL UPDATE
DSI in overseas move Firm buys 82% stake in Germany’s Passavant Roediger Dubai firm Drake & Scull International (DSI) has bought an 82% stake in German water, wastewater and sludge treatment outfit Passavant Roediger. The European company’s main activities include engineering and technical services for worldwide wastewater treatment plants (WTPs) and sludge digestion plants, turnkey plants for municipal and industrial wastewater treatment, and the provision of advanced equipment for aeration, mechanical sludge thickening and dewatering. DSI has paid US$39.5 million for the stake; the remaining 18% is owned by Bilfinger Berger. “This is a strategic acquisition that realises the company’s plans for both vertical and horizontal expansions,” said DSI CEO Khaldoun Tabari. “It gives DSI vertical expansion by adding to the services that the company offers, and horizontal expansion through opening new
HIGHLIGHTS DUCAB PLANS FACTORY UAE cable manufacturer Ducab has started work on a new $136.1 million factory to help expand public sector electricity networks. Located in the Jebel Ali area, the new facility is a joint venture with Dubai’s Water and Electricity Authority (DEWA) and Abu Dhabi’s Water and Electricity Authority (ADWEA), each holding a 25 percent stake, the company said.
UAE DEMAND TO DROP
Khaldoun Tabari, chief executive officer of Drake & Scull International.
markets and providing the company with a larger geographical reach. The engineering projects taken by Passavant-Roediger will also generate revenues for DSI’s other business streams including MEP and Civil Contracting, as wastewater and water treatment
plants require engineering, procurement and construction disciplines,” Tabari added. Passavant-Roediger currently operates in, Romania, Hungary, Poland, Croatia, Germany, Algeria, UAE, Turkey and China with projects around the world.
The UAE government expects that the recent recession will have an impact on long-term electricity demand and has cut its 10-year forecast by around 30%, according to a report in The National newspaper. In the forecast period, the UAE will increase capacity by 81% to 33,500MW, said Oil Minister Mohammed Al Hamli, according to the state news agency WAM.
CLARIFICATION
Ras Al Zour megaproject reopens for tendering The Saline Water Conversion Corporation (SWCC) has declared that the Ras Al Zour Desalination and Power Plant project is now open for tendering. The documents and specifications for the tender can be bought
from the SWCC headquarters in Riyadh. Offers from bidders should be submitted to the company by March 20, 2010, and offers will be opened the next day. In total, Ras Al Zour will provide 1,025,000 cubic metres of
18,400 Number of visitors, from 84 countries worldwide, to the World Future Energy Summit 2009 See story on page 19 www.utilities-me.com
desalination water and 2,400MW of power, and the time for completion on the project is expected to be three years. “The 2,400MW power will be distributed between Maaden (1,350MW), 1,000MW for Saudi Electricity Company (SEC) and 50MW for the secondary manufacturing factories in Ras Azzour industrial area,” said Fehied Fahad Alshareef, the governor of SWCC. Alshareef added that on the water side, a million cubic metres was designated for the Riyadh area, with the final 25, 000 cubic metres for Maaden.
In the December issue of Utilities Middle East, we quoted Aquatech business development manager Vikrant Sarin as saying that the company had 40 installations globally. In fact, Aquatech has more than 40 installations in the Middle East and more than 1700 installations globally. We are happy to put the record straight. In other news, Aquatech has just won a US$10 million contract with JGC for a demineralising water treatment plant as part of Saudi Aramco’s Manifa Oil Field Development Project in KSA.
January 2010
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Utilities Middle East 5
REGIONAL UPDATE
HIGHLIGHTS JAPAN FIRM JOINS TECHNOPARK Japan-based Torishima Pumps has signed a contract with Dubai’s TechnoPark to set up a service facility for its wholly-owned subsidiary, Torishima Service Solutions. The 9,652 m² facility will comprise a state of the art workshop with a team of experienced engineering and design professionals to help the company deliver support services to its wider Middle East clientele.
Duqm RFP in September Next step towards completion of coal-fired plant takes place
FIRST OSMOTIC POWER PLANT OPENS Europe’s largest renewable energy firm, Statkraft, has opened the world’s first osmotic power plant in Norway. Although the prototype plant only produces around 2-4kW of power at the moment, the company is using the facility to improve the efficiency of the membrane from around 1 watt per square metre to around 5 watts per square metre, which Statkraft believes will make osmotic power costs comparable to other renewable energy sources.
BRIT FIRM SCOOPS COOLING DEAL A team of Teesside consulting engineers has clinched a major contract in the Middle East. Simpson Coulson & Lees, based in Billingham, has secured a key contract to provide technical expertise on an 80,000 tonne district cooling plant on Al Sowwah Island in Abu Dhabi. The project is earmarked to supply cooling to more than 95,000 mixed-use units being built on the island.
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The tendering process for the GCC’s first coal-fired power station at Duqm will launch in April this year.
Law firm Simmons & Simmons has won a contract to provide advisor y ser vices to the Omani government in the development of the coal-fired Duqm IWPP. The company joins KPMG (lead/financial advisor) and Australia’s WorleyParsons (technical adviser) on the project. The move is significant as Simmons & Simmons will now work
to draft the project documents for Duqm, which is earmarked to have a power generation capacity of 1,000MW, as well as a desalination element. Duqm is on course to be the first coal-fired power plant in the GCC, offering power to not only the local area, but also to the north of Oman as well, via the countr y’s Main Interconnection
System (MIS), according to the Oman Daily Observer newspaper. The daily also reported that Oman plans to launch the tendering process in April 2010, with the request for proposals set for September 2010. It is likely to be awarded in August 2011, with full commercial operation earmarked for around Januar y 2016.
Rio Tinto exits giant Abu Dhabi CCS JV with BP Rio Tinto has said that it will be focussing the majority of its investment in carbon capture and storage (CCS) technology on the Hydrogen Energy California (HECA) project, a proposed new hydrogenpowered electricity facility that will capture and store most of its carbon-related emissions to produce clean electricity. Rio Tinto’s decision to focus on HECA has necessitated a restructure of the broader Hydrogen Energy joint venture with BP. Rio Tinto said that it had sold its 50 per cent interest in Hydrogen Energy International Ltd (HEIL), which
owns an interest in the Hydrogen Power Abu Dhabi (HPAD) project, to BP for an undisclosed sum. Preston Chiaro, group executive, Technology & Innovation, said that the California project is an excellent strategic fit for Rio Tinto as it will use coal or petcoke as a feedstock. “We look forward to continuing to work with our partner BP, the US Department of Energy and other key stakeholders to deliver the California project, which we regard as a critical project in the development of CCS technology,” he said. “The Abu Dhabi project is a ground-breaking and important
project based on gas feedstock, but Rio Tinto prefers to focus on projects with solid fuel feedstocks, which are better aligned with our other businesses,” Mr Chiaro said. “We wish BP and Masdar (the joint venture partner in the project) well and continued success with the project.” Mr Chiaro added: “Rio Tinto is committed to the development of CCS and the need for action on climate change, and it supports a strong binding international agreement on climate change that will address both the environmental challenge, as well as provide greater certainty for investment decisions.” www.utilities-me.com
REGIONAL UPDATE
DEWA confident despite crisis Plans for Q1 2010 US$2bn bond unclear; leading businessman expresses faith
Sheikh Hasher recently invested in DEWA.
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Despite the ongoing fall-out over the Dubai World debt restructuring, Dubai Electricity & Water Authority (DEWA) has denied reports that it will be forced to make a US$2 billion bond payment, due to downgrades in the utility’s investment rating. DEWA, unlike the Dubai World portfolio, has a sovereign guarantee, although this has not prevented a downgrade from Moody’s earlier in December. “DEWA is very strong financially,” a spokesman told the National newspaper. “There has been no request [for the bond repayment] from banks.”
The payment concerns relates to a report that the company’s securitisation instrument, Thor Asset Purchase, might have to be redeemed in full next week. The news came as DEWA has been reported to be preparing a US$2 billion bond issue in the first quarter of this year, although the utility has not confirmed this. In December, Sheikh Maktoum Hasher Maktoum Al Maktoum, a prominent UAE businessman and CEO of Al Fajer Properties, said that he had recently invested in DEWA and chided ratings agencies for their past mistakes.
“I myself have invested in DEWA, as it’s obvious that people are going to need electricity and water,” Sheikh Hasher told the audience at the Arabian Business Conference, held last month in Dubai. Ratings agency Moody’s has again hit the headlines by putting all government-related issuers (GRIs) in the UAE on review for possible downgrade. The scope of this decision includes firms such as Abu Dhabi’s Mubadala, Abu Dhabi National Energy Company (TAQA), Dolphin Energy and International Petroleum Investment Company (IDIC).
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Utilities Middle East 7
WEB HIGHLIGHTS
ONLINE ANALYSIS
ONLINE ANALYSIS
Dow strikes nanofiltration deal in Saudi Arabia The Dow Chemical Company has signed a significant deal with Saudi Arabia’s Ministry of Water and Electricity to supply nanofiltration technology for the first plant of its type in the country, in the province of Ha’il.
Most popular headlines EDITOR’S PICK
FEWA signs ERP contract with Siemens The Federal Electricity and Water Authority (FEWA), which provides utilities in the UAE’s northern emirates, has asked Siemens to implement enterprise resource planning (ERP), including customer relationship management (CRM) and billing.
BREAKING NEWS AND VIEWS FIRST
World Bank invests US$5.5bn in MENA solar power Clean Technology Fund approves financing for 11 plants in Algeria, Egypt, Jordan, Morocco and Tunisia.
First osmotic power plant opens in Norway Europe’s largest renewable energy firm, Statkraft, has opened a prototype facility that is set to examine membrane efficiencies.
Serbian water firm looks for Middle East business LAD Group, which has extensive experience in the Balkans, is hopeful of gaining entry into the lucrative regional water market. www.utilities-me.com
1. US engineering firm teams up with Masdar 2. AECOM inks another Abu Dhabi contract 3. Diplomats enter fray as nuclear bid race draws to a close 4. Teams submit revised bids for UAE nuclear deal 5. UAE electricity demand to drop by 30% 6. Palm Jumeirah contractor cools off on Dubai 7. DEWA plans US$2bn bond issue in Q1 2010 8. Ras Al Zour opens for tendering 9. Sheikh Hasher backs investment in DEWA 10. Acciona Agua targets ME water sector
SPOT POLL
Will you be attending the World Future Energy Summit 2010?
YES 50.5%
NO 30.7 % NOT SURE 18.8% January 2010
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Utilities Middle East 9
NEWS ANALYSIS
Rethinking the GCC water conundrum The dire pollution situation in the Gulf is in need of drastic action. One global association - IDA - is trying hard to achieve local change
As one of the world’s fastest evolving industries, desalination has seen unprecedented capacity brought online in the last five years. But with growth comes added recognition, and added responsibilities. As the spotlight fell on the industry during the recent International Desalination Association (IDA) World Congress held in Dubai, experts at the event were keen to stress the sector’s green credentials. According to Christopher Gasson, the publisher of Global Water Intelligence, the average additional amount of capacity brought online for seawater desalination has risen from around 1 million cubic metres a year to an extra 4.3 million cubic metres in 2009 alone. “Whereas completion of plants has reached a peak this year,
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peak water due to over-exploitation of its own groundwater resources.” What’s worse is that the quality of the water now available to the King-
exporting around twice as much wheat as it was consuming. “Saudi Arabia’s recent decision [to cut back the wheat subsidy] has
“Saudi Arabia has now reached peak water due to over-exploitation of its own groundwater resources” Christopher Gasson, publisher, Global Water Intelligence
dom from aquifers is more expensive to obtain – it is necessary to dig deeper – and the higher salinity means that it can’t be used for agricultural purposes. Saudi Arabia, in particular, has come in for heavy criticism following its decision to become self-sufficient in wheat, and in the process allowing agriculture to consume around 90% of its annual water supply. By 2002, the Kingdom was
been absolutely essential,” Gasson said. “The exports have ended, and the subsidy is now going as well. But other crops are still being grown.” Desalination will play a key part in redressing the balance. And the industry’s renewed responsibilities have been crystallised in the formation of a new task force to help combat the effects of pollution in the Gulf caused by the desalination industry, as reported in the Decem-
Credit to Getty
Christopher Gasson, Global Water Intelligence.
there’s naturally a lag between the time when plants are contracted and completed, and the peak year for contracting was in 2007,” Gasson stated. “There’s been a fall this year, partly due to the crisis – certainly in Dubai – and partly due to the fact that other countries, such as Australia, which had steeply escalating plans, are now plateauing.” Gasson believes that the next cyclical burst of growth will probably occur around 2014-16, where the additional amount of capacity being brought online will start rising to around 6-8 million cubic metres a year. “The comparison I make is that the River Thames discharges around 5.7 million cubic metres a year into the English Channel – after 2014, the seawater desalination industry will be adding a new River Thames to the world’s freshwater supply. Except, of course, that this is a river flowing backwards,” Gasson added. All this added capacity should in theory provide a renewable water supply that should take the pressure of non-renewable groundwater resources. There is, of course, a vast discrepancy between the amount of rainfall that visits the Arabian Peninsula and the amount that is being used by the local population. Historically, the shortfall has been made up by fossil groundwater, and that resource is being swiftly exhausted. “In Saudi Arabia, total precipitation is 2 cubic kilometres a year, with actual use running to 22 cubic kilometres a year,” indicated Gasson. “The country has now reached
The alternative to desalination could be even more detrimental to pollution levels in the Gulf.
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NEWS ANALYSIS
FAST FACTS
2
Amount of annual precipitation, in cubic kilometres, falling on Saudi Arabia
22
Amount of water, in cubic kilometres, actually consumed by Saudi Arabia annually
4.3
Amount of extra capacity, in milions of cubic metres, added to the global desalination market in 2009
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ber issue of Utilities Middle East. An inaugural meeting has already taken place, and a steering committee has been formed that will decide the make-up of the taskforce. “We anticipate that it will be composed of representatives from UNESCO, universities and experts in environmental issues that are specific to the region,” said Lisa Henthorne, the now-former president of IDA. “Its objective is primarily to facilitate discussion, and it’s likely that there will be a conference to consider the topic in the near future .” So far, it seems, the initiative has been well-received. “We’ve only had positive feedback,” Henthorne added. “Our sponsor, TechnoPark, held an invitation-only workshop that consisted of government representatives and stakeholders in the industry. But the only thing we can change is what we can impact. I can’t predict
how or if those impacts will be mitigated – but that’s all we can do.” The other factor that will help the push towards renewable water resources is water reuse, an area in which the Middle East has traditionally been lacking. “The biggest area of investment today is not desalination, but wastewater collection, treatment and reuse,” claimed Gasson. “There are huge programmes to build new WTPs in Saudi Arabia and a $4 billion national water reuse programme in Oman.” Gasson is clear that the environmental issue should be seen from the perspective of the whole water sector, and that the alternative to desalination is often much more detrimental. “When the Ilusu dam in Turkey is completed, its affect on the salinity of the Gulf will be greater than the impact of all the desalination plants based
in that area,” he indicated. “Irrigation schemes in West Asia leach salts and pick up pesticides, which become a hazardous dust when the water reaches the Aral Sea. You have to view the impact on the plant in context; creating renewable water resources is a vital way of protecting our environment.”
Former IDA president Lisa Henthorne.
January 2010
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Utilities Middle East 11
INTERVIEW
Calling the shots Consultancy firm MWH Global has diversification and expansion on its bulging agenda. Director of operations Andrew Scoble tells Utilities Middle East about the company’s future plans
W
ith the economic recession thinning out the excellent consultants from the bad, the onus is on the best companies to provide a stronger and more varied portfolio of products to their clients. For the utilities industry, which is still benefiting from significant injections into regional infrastructure budgets, this is coming to mean a tendency towards integrated solutions. No longer is it enough for the larger contractors or consultancies to offer single products, but there is an inherent requirement for a differentiated strategy that provides maximum value to the client, especially where budgetary constraints may exist. Fulfilling that demanding role is ‘wet infrastructure’ specialist consultant MWH Global, which is leveraging its 6,000-strong worldwide workforce to bring newer offerings to its range of stellar Middle Eastern clients. With a 60-year history in the region, the firm is not new to the finer workings of the local industry, but director of operations for MWH Middle East Andrew Scoble is adamant that the consultancy will not rest on its laurels.
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“The concept of wet infrastructure also includes programme management and asset management – areas in which we’ve pushed the boundaries quite far in comparison to other international consultants – but we’re mainly focused on water, wastewater and process technologies, along with solid waste and renewable energy,” Scoble explains. “Most of our history here consisted largely of long-term basic engineering for clients, focusing on issues like municipal drainage and water distribution, but about six years ago, we decided to import our global knowledge and carry out a large amount of process design.” The fruits of that decision are obvious via a quick look at the local MWH portfolio, which contains a significant amount of government work throughout the GCC. In Dubai,
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INTERVIEW
the firm acts as Dubai Municipality’s main advisor and supervisor for the mammoth Jebel Ali Wastewater Treatment Plant (WTP), which is planned to be one of the largest in the world. In Abu Dhabi, MWH is also involved – either as a client’s engineer, contractor’s designer or lender’s agent, to carry out due diligence or as a checker - with a high percentage of the WTPs being built, some of which are extraordinarily complex. The firm is the lender’s engineer for Abu Dhabi Sewerage Services Company (ADSSC)’s Al Wathba and Al Saad plants, and is also involved with the more advanced membrane bioreactor (MBR) facilities on Reem Island and Saadiyat Island. “Water treatment for us in this region is still quite embryonic, because there has long been a focus on the larger and more centralised thermal desal plants,” says Scoble. “Our experience globally has been on reverse osmosis [RO] membrane technology, so we are now starting to look at smaller plants, or brackish water plants for clients that are using other types of source water such as groundwater or recycled industrial effluent.”
“The only way you can be successful as a consultant in this industry is to be your client’s trusted adviser”
For Scoble, success in this field is more about specifying the membranes. “It’s really understanding how far you can push the project and how you can integrate it into a system. To get the maximum value out of a product, you have to systemise the whole thing and get it bolted together into a coherent plan; that’s how you get your savings, and that is exactly what the client is trusting us to do.”
Another major project that MWH is hoping to win is the ADSSC deep pumping station contract at Al Wathba. A consortium led by Kharafi National, and which includes MWH and a number of other contractors, will construct a pumping station around 100 metres below ground in order to receive, screen and pump water from a new tunnel being built from Abu Dhabi island. “There are only a few manu-
MWH AND LIBYA’S GREAT MAN MADE RIVER
MWH and its consortium of partners is hoping to win a complex ADSSC pumping station contract. The company has a stellar list of government clients in the GCC and overseas.
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facturers who can design and build pumps that big,” Scoble says. “We’ve done similar pumping stations at the same capacity or depth in Kuwait and Hong Kong and the people who designed those projects are actually on our team. We’ve got a couple of features in our tender that we think will be appealing to ADSSC.” But MWH’s portfolio is not limited to just the UAE. Through its joint venture with Gulf Consult in Kuwait, the firm has won a number of complex sewerage projects, including a recent US$17 million four-year contract to assist with sewerage and new trunk mains pumping stations in Kuwait. In Jordan, MWH has just won a $2.5 million contract with the Millenium Challenge Corporation. With regard to the key Saudi market, Scoble says that has been something of a hiatus in the company’s activity. “We used to be one of the biggest consultants there and we pulled out about 10 years ago, although we’re now looking at going back in again,” he states. “We will try
This project will last approximately 12 months and will take water from the Great Man Made River and deliver it to over 15,000 farms on the Coastal Plan located to the south of Tripoli. The network will be divided into 6 separate zones, to allow efficient management of the water system. Each zone will be provided with 1495 litre per second. This agricultural area covers approximately 80,000 Ha and provides a range of produce including fruit, olives and vegetables to local and international markets. The provision of this water will improve the livelihood of local farmers.
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Utilities Middle East 13
INTERVIEW
and build strong relationships and develop our business organically, focusing on core clients such as government bodies or their agencies, or with firms like Saudi Aramco.” The MWH executive adds that there are a couple of projects the firm already has its eye on, including water transmission schemes. “Our contacts in Saudi Arabia want to bring us into the country – I’ve fielded some calls recently over the flooding crisis in Jeddah – and there’s no doubt that the Kingdom is a huge market.” Scoble is also keen to highlight the benefits of Libya as an emerging market. MWH is working on two types of project in the North African nation; infrastructure projects for quasi-government clients, and specialised water modeling and irrigation design for clients such as the Great Manmade River Authority (with which MWH won a $5 million contract). “We’ve just opened an office in Tripoli and have seen no downsides to working there,” Scoble indicates. “Naturally you need to be Arabic-speaking, but that’s something that our business has to adjust to.” The issue of language clearly reflects greater efforts on the part of MWH to build closer relationships with its client base. Scoble says that from a recruitment perspective,
the consultancy needs to be able to communicate and participate more effectively in local business dealings, and has plans to recruit more Arabic-speaking project managers. “That’s probably a reaction to more indigenous consultancies springing up,” he explains. “But it’s also more of a respect issue. These countries have developed enough to pick and choose and inject their own identity into the equation and we have to respond to that. A typical project will incorporate overseas experience from global operations, expat experience from employees who have worked in traditional Western sectors, and local talent that can bridge the gap with the client and prevent a lapse in communication.” In terms of industry trends, Scoble sees a few developments on the horizon. Not only is the shift from thermal desalination to RO playing into the company’s hands, but it’s also
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January 2010
clear that the issue of water reuse is becoming increasingly important. Gulf nations are already looking at recycling water for irrigation, and also for district cooling. On that note, he sees Abu Dhabi’s plan to recycle 100% of its water by 2015 as entirely possible, and believes the authorities are going about this plan in the right way. But recycling for potable usage is still some way off, mainly due to cultural perceptions. “The way I think it will work
“Management of aquifers and groundwater is crucial - the way they’re being used at the moment is completely unsustainable”
MWH has carried out landmark work on the Jebel Ali STP, planned to be the world’s largest.
14 Utilities Middle East
The firm is aiming to grow its GCC footprint.
in this part of the world is via aquifer recharge – so we can treat the water to potable quality but deliver it to an aquifer rather than the tap,” says the director. “Management of aquifers and groundwater is crucial – the way they’re being used at the moment is completely unsustainable.” Scoble thinks that the firm has probably weathered the storm in terms of the recession. While it has been a tough period – MWH lost around 6-7% of staff in the region – the executive believes it is performing well in relation to its competitors as a result of its focus on government clients. “Looking ahead, we want to continue working for those kind of clients, plus extra work in Kuwait, KSA, and also Qatar and Oman,” Scoble outlines. “We aim to expand carefully from a geographical perspective and once we have a good base, we can look at programme management opportunities.” On the programme management side, MWH is leading the water sector in markets such as the US and UK and hopes to bring this service to strategic clients in the region. MWH is also seeing that clients locally are taking are taking a more structured approach towards asset management. “We have lots of ideas, systems and tools to help our clients,” the executive adds. “We can help with redesigning business organisation, asset management accreditation and asset management optimisation, which is more of a management consulting angle.” For the time being, though, MWH is happy to focus on the fundamentals and continue to work with its strong set of strategic clients in the region. “The only way you can be successful as a consultant is to be your client’s trusted adviser,” Scoble concludes. “We promote people and train people on how to be a trusted adviser – it’s absolutely key to us. We can go and win projects fairly easily, but we need to guard our reputation because at the end of the day that’s all that counts.”
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GAS CITIES
Maximising value The Gas Cities concept has the potential to create long-term economic stability, says Badr Jafar
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s the most prolific hydrocarbon region in the world, the Middle East has long been attempting to add value to its most vital exports. With Saudi Arabia spending vast amounts in developing its petrochemicals industry, one firm, in particular, is looking at gas as a way to earn extra revenue for regional nations. “Most international oil companies (IOCs) go into a country to source commodities for export,” says Badr Jafar, executive director of Crescent Petroleum and executive chairman of Gas Cities, a joint venture between Crescent Petroleum and
Dana Gas. “With natural gas that usually entails pipeline projects and LNG shipping in order to export it – once that gas molecule has reached the border, you’ve exchanged its value and that’s it.” Jafar says that using the gas molecule within the exporting country’s borders to maximise the netback value of the gas can have an economic multiplier effect. Often, the power generation sector receives the greatest benefit, which in turn encourages added foreign direct investment, mass employment, training, education and so on. “Natural gas is a great facilitator to build political, social and eco-
“Natural gas is a great facilitator to build political, social and economic bridges between two different countries”
16 Utilities Middle East
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January 2010
nomic bridges between two countries,” continues Jafar. “I think that gas has something that oil doesn’t and that is the fact it can act like an umbilical cord between two nations, which then promotes long-term stability, as natural gas projects tend to be measured in decades not years.” From the industrial perspective, the Crescent executive believes that one strong solution is his firm’s Gas Cities concept. The Gas Cities Ltd joint venture company has been set up to explore the possibility of clustering various industries so that by-products and waste from one sector can then be used as feedstocks and energy for its neighbours. “In the Gas Cities, we would like to be able to develop the gas resources ourselves, and price that feedstock according to what the industries can afford,” explains the Crescent executive. “That would incentivise an industry to be efficient, and simultaneously allow us to share in the profits of that industry.”
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GAS CITIES
Crescent’s pipeline investment is considerable.
Iraq, where Crescent Petroleum has a rich history, has huge potential with regard to Gas Cities, as it has the opportunity to start afresh.
GAS CITIES: AT A GLANCE “The concept of Gas Cities is based on the effective utilisation of natural gas as feedstock, thereby maximising the value of industrial outputs. In the Gas Cities, available natural gas is converted into economically viable petroleum related products & derivatives by systematically utilising the operational synergies and economies of scale arising from clustered industrial units. Designed to be selfsustaining, Gas Cities offers services that will satisfy all industrial/business needs. Highly developed infrastructure ensures smooth logistics, while service facilities like banks, financial centres, engineering and business consultancies offer increased in-house flexibility and intercluster synergies.” Source: www.gascities.com
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As an example, Jafar referred to the ammonia industry. If the price of ammonia doubles, the ammonia sector should pay more for its feedstock. “Likewise, if the commodity price falls, we go down together, because we always want to have a happy tenant – as long as we are both able to share in the good times.” While this concept would be admittedly difficult to establish in the more mature local markets, Jafar has set his sights on potential high-growth sectors, such as Iraq. Crescent Petroleum already has a long heritage in the country, and was instrumental in the construction of a 180-kilometre gas pipeline to provide feedstock for two independent power plants (1,500MW and 750MW) ordered by the Kurdistan Regional Government. “Iraq in this regard has huge potential, because it has an opportunity to start afresh, and build the necessary framework today,” said Jafar. “The biggest problem Iraq faces is to break out of that negative mindset and influence that is coming from some of its neighbours, who don’t
necessarily want to see Iraq flourish as fast as it can.” Studies conducted by Gas Cities indicate that there are three areas where the concept would add the most value. In each of those three areas, the firm has reached beyond the preliminary discussion stage. “There’s the Kurdistan region of Iraq, where we have identified a 42 square kilometre piece of land in the north,” said Jafar. The second Gas City is in Egypt, where we are currently identifying potential sites, and where we are now working with the Egyptian government. In addition, in Yemen we have conducted
Gas Cities are designed to be self-sustaining.
a pre-feasability study along with the Yemeni government to identify a location for the site, and signed an MoU with the government a few weeks ago. “Yemen is a great example because they know that have gas resources, but their only use at the moment is for LNG export,” Jafar continues. “Most of the PSAs in Yemen only extend the title holders to the oil, not the associated gas, so there has been no incentive for companies to develop the gas infrastructure. There is now a drive to change some of those contracts to cover titles to the gas too.”
ANALYST BMI’S TAKE ON THE YEMEN GAS CITY COMPANY The Yemen Gas City Company is planning a US$20bn industrial city in Hodiedah. Powered by gas, the industrial complex will house petrochemical and heavy manufacturing plants, as well cement plants and power stations. A memorandum of understanding (MoU) for the project has been signed by the UAE’s Dana Gas and Crescent Petroleum, which are planning to build four gas cities in the Middle East. As well as creating upwards of 90,000 jobs, the gas city is expected to attract US$15bn-US$20bn in foreign investment over the next three decades.
January 2010
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Utilities Middle East 17
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EVENT PREVIEW
World Future Energy Summit 2010 With Copenhagen sewn up, the spotlight is switching to Abu Dhabi
WFES 2010:
In quotes
“We really need to build the green economy of the future by jettisoning fossil fuels and embracing renewable energy.” Mohamed Nasheed, the president of the Maldives, who is a keynote speaker at WFES 2010.
Last year’s edition of the World Future Energy Summit saw over 18,400 visitors attend from 84 countries.
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s Utilities Middle East went to press towards the tailend of December, the final details of the Copenhagen climate summit were starting to become a little clearer. The main headlines in the international press have by and large intimated that the conference was a failure, as the nations taking place only managed to reach a weak outline of a global agreement, without anything more substantive being signed up. For now, the focus will turn to the Abu Dhabi and the four-day World Future Energy Summit (WFES) 2010 – being held from January 18th – 21st which is the perfect opportunity for companies as well as countries to put their messages across. With 2009 being such a successful year for Abu Dhabi on the renewable energy front as a result of the
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“We are pleased that we have received significant interest from young Emiratis for the Young Future Energy Leaders programme” decision of the International Renewable Energy Agency to base its headquarters there and the continuing work at Masdar, WFES comes at exactly the right time for Middle Eastern companies to get the best out of some truly international networking opportunities. And it certainly is a bumper programme this year. The fourth edition of WFES has invited a number of analysts, executives and politicians from over 100 countries to bring their experience to the event, with the focus being placed
on the actions necessary to balance demands the world is facing between an economic and social need to boost energy infrastructure to fuel economic growth and environmental imperatives that must be met to ensure sustainability. The International Energy Agency (IEA) has predicted that 70% of the increased energy demand to 2030 will come from developing countries. Meanwhile, the other 30% of this growth will emanate from developed economies, which will continue to witness growing demand
“A carbon price alone will not get us where we need to go unless it is supported by comprehensive regulation that will encourage and facilitate new sources of clean energy. Feed-in tariffs and rules to make sure renewable energy providers can link easily into the grid are essential to stimulate more active investment in alternative energies.” Kevin Parker, global head of Deutsche Bank’s Asset Management division. “Exposure to the quality of experts taking part in World Future Energy Summit will help our young people develop an international perspective that will be essential to developing a global solution to energy challenges.” Dr Sultan Al Jaber, CEO of Masdar.
January 2010
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Utilities Middle East 19
EVENT PREVIEW
Global energy demand is expected to soar by 44% over the next two decades.
Quick WFES Facts Date
Monday 18th to Thursday 21st January 2010
Opening Ceremony
Monday 18th January 2010 11:00am to 12:30pm
Summit timing
9:30am to 5:30pm
Exhibition Timing
10:00am to 6:00pm
Location
Abu Dhabi National Exhibitions Center
Selected Summit Highlights Monday, January 18th, 2pm Plenary Forum 1 World Future Energy Policy – Energy Ministers’ Roundtable As well as the interim director of IRENA, senior energy officials from Canada, Switzerland, Holland, India and Japan – as well as the UAE – will discuss how the role of renewable energy will shape the future of the planet.
Wednesday, January 20th, 11am Into The New Electricity Age with Smart Grids – Summit Room B Khaled Awad, director of property development unit, Masdar, takes a look at this vital sector in conjunction with senior executives from Siemens, ENEL and RWE Effizienz.
Tuesday, January 19th, 2pm Advanced Solar Technologies, Materials and Costs – Summit Room A Executives from the Fraunhofer Institute for Solar Energy Systems, Calisolar, First Solar and Schott Solar discuss the advances being made in the major PV technologies; crystalline Si, thin film and high-efficiency concentrated PV as well as concentrated solar thermal technology.
Thursday, January 21st, 11am Panel on Private Sector Successs Criteria for Project Finance in Sustainable Energy – Main Summit Theatre The flow of capital for funding sustainable energy projects is crucial to the success of the world’s future energy supply. This panel brings together leading private sector financiers to discuss the criteria for successful funding in today’s challenging economic climate.
as they get wealthier, and as their populations expand with everincreasing migration from the developing world. In addition, the US-based Energy Information Administration has said that global energy demand is expected to soar 44% over the next two decades, fuelled heavily by the emergence of economic heavyweights such as China and Russia. With China playing a key role in the success or otherwise of post-Copenhagen climate change talks, the importance of the emerging nations has never been more crucial. One of the highlights of WFES this year will be the launch of a special programme, Young Future Energy Leaders, by Masdar Institute of Science and Technology (MIST), which threw open its doors for the first time during 2009. The four-day programme is designed to offer 150 participants an unparalleled opportunity to engage in discussions with the world’s foremost experts in energy, climate change,
policy, and sustainability. They will also have a chance to network with government representatives, businesses leaders and other organisations active in the area of alternative energy and sustainability. “We are particularly pleased that we have received significant interest from young Emiratis in attending the Young Future Energy Leaders program, which will increase their awareness of and participation in the fields of alternative energy and sustainability,” said Dr Lammya Fawwas, assistant provost for regional affairs at MIST. “This is just one of a number of outreach activities planned by Masdar Institute to develop Nationals into leaders in these fields, as part of the overall vision for Abu Dhabi.” Unsurprisingly, there are a huge number of international and local companies showcasing their wares at the event this year. Amongst the biggest firms attending that will be of interest to utilities executives are GE, ADWEA and Siemens.
This year sees the fourth edition of the World Future Energy Summit.
20 Utilities Middle East
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January 2010
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EVENT PREVIEW
Masdar news round-up As event host and HQ of IRENA, Masdar City will be looking to make a splash at WFES 2010 Masdar City – the carbonneutral development currently taking shape on the outskirts of Abu Dhabi – has just signed a six major supply and installation contracts, worth around US$2.9 billion, for the world’s first 1GW offshore wind farm, located in the United Kingdom’s Thames Estuary. Offshore work on the London Array project will start in early 2011, with phase one of construction earmarked for completion in 2011. “The completion of these contracts marks a major step towards making the project a
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A concept image of Masdar City.
reality,” said Dr Sultan Al Jaber, CEO of Masdar. Masdar is working on the development in partnership with Dong Energy and E.ON. Over
the last few years, Masdar has invested around US$15 billion in renewable energy projects around the world and at home. Also during December, the Masdar subsidiary, Masdar PV, saw its solar photovoltaic (PV) panels installed for the first time on a commercial rooftop. The installation took place at the stainless steel tube systems company Dockweiler AG, in Neustadt-Glewe, Germany. “We are delighted that our solar modules are now being used for the first time in a roof mounted system – shortly after having equipped the first open
space solar park with them. The company Ralos has been awarded the contract for planning and installing the equipment and we are hoping to work with them on future projects as well,” said Joachim Nell, COO/ CMO of Masdar PV. Lastly, the Neutral Group, a global carbon consultancy, also chose December to announce that it is relocating its headquarters to Masdar City. The Neutral Group assists companies such as BP and DHL calculate and reduce their carbon footprint.
January 2010
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Utilities Middle East 21
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GENERATORS AND COMPRESSORS
The
generator game What are the effects of the global economic conditions on the Middle East’s vital generators and compressors market?
C
ontrary to popular belief, there are still certain service sectors for the utilities sector that seem to be outperforming the market. In the field of generators and compressors, the demand has never been higher. For generator companies, the rental option is still becoming more and more prevalent. “Leasing has a cushioning effect for companies who are uncertain about the long-term future of their projects,” explains Phil Burns, managing director of Aggreko Middle East. “By renting equipment, firms can ensure that they will not be left with equipment that will sit unutilised; if a company that has purchased large amounts of equipment decides that a project must be put on hold, the cost damage incurred can be major.”
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“Currently business is running extremely well. In fact, our order book has never been higher”
In general terms, clients’ unwillingness to invest large sums of capital means that the rental option is perfect for companies that may not be able to afford such large lumpsum outlays. Furthermore, lead times are by definition shorter with rental solutions, which can be utilised within days (or even hours – see case study) of an agreement being signed. Lastly, the flexibility that the leasing option provides – allow-
ing clients to increase or decrease capacity at the drop of a hat – means that, all in all, for some companies, the rental packages are certainly making more sense. In the market for compressors, however, there is a belief on the part of some that while the rental sector is strong in the construction sector, this has not yet passed over to the utilities industry. Burns believes that as Aggreko has just come out of
a busy summer period, the company is still benefiting from the seasonal increase in business due to summer shortages. This positive outlook is reflected by Kaeser Kompressoren, a major provider of compressed air technology, which bases its regional head office in Dubai’s Jebel Ali Free Zone. “Currently, business is running extremely well, in fact our order book has never been higher,” says Carl Briden, director at Kaeser Kompressoren. “Obviously the first few months of 2009 were difficult for everyone due to the uncertainty in the market. However, we have noticed that with a need for greater efficiency across all market sectors, decision making has tended to be more focused on quality and energy efficiency rather than just the bottom line.” January 2010
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Utilities Middle East 23
GENERATORS AND COMPRESSORS
FIVE TO WATCH Utilities Middle East reviews five local operators in the generator sector
Caterpillar supplies its range of gensets to five GCC countries.
Aggreko can supply generators from 15 kVA to 2 000 kVA in single units, as well as multi-megawatt packages using 1 250 kVA units linked together. Smaller sets are used to power Portacabins, piling machines and hand tools, while construction cranes are usually powered by 250 kVA or 320 kVA generators. Altas Copco provides portable and stationary generators. The company has reported increased activity in the larger 500 kVA to 1 000 kVA category due to power shortfalls in some urban areas, but it mainly supplies contractors who require units in the 20 kVA to 275 kVA range. Caterpillar provides gas-powered gensets ranging from 9 kW to 600 kW and dieselpowered generator sets from 7 kW to 16 200 kW. It supplies these products to a total of five GCC countries for which Al Bahar, a machinery and trading group in the Middle East, has the Caterpillar dealership. Caterpillar has a number of different models to cater the needs of the industry and for varied project requirements.
24 Utilities Middle East
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January 2010
Cummins offers gensets between 15 kVA and 500 kVA. The 250 kVA to 500 kVA range is used during construction for powering offices, cranes and other miscellaneous construction requirements. Gensets ranging from 500 kVA to 3 000 kVA are used for permanent installations as back-up power to local utilities companies in most buildings. Cummins believes that contractors prefer to rent generators for specific projects instead of owning the equipment and continuously moving it to new project locations where they incur hefty logistical costs. FG Wilson designs and manuu factures diesel and gas gensets. Its most popular products for construction sites range from 60 kVA to 500 kVA. It also gensets from m 10 kVA to 2 200 kVA so as to o be able to cater for customer er demand. All these can be supplied as sound-attenuated ed and weatherproof canopied d gensets. FG Wilson offers techechnical support from pre-saless and aftersales support from m installation to commissioning. Its Middle East businesss includes countries such as Iraq aq and Afghanistan.
In terms of trends, the themes of sustainability and diversification are most prevalent. Rather than relying on one particular type of fuel, customers are looking to expand their capacity to include two or more fuel types. “One of our customers, a cement company in Ras Al Khaimah, has its own gas-powered turbine, but contracted a diesel-powered package from us to provide additional capacity to their facility,” says Burns. Aggreko has reacted to this demand by introducing its ADDGas system, which allows customers to substitute a significant portion of diesel fuel with natural gas, giving the customer a considerable saving on overall costs. On the sustainable side, Kaeser Kompressoren ensures that consumption is kept to a minimum by producing highly energy efficient compressed air stations. “With compressed air generation requiring over 30% of all electricity consumed in industry today, it is our responsibility as manufacturers to look at ways of reducing this consumption,” says Briden. “The ultimate benefit is a greener environment.” Whereas supply chains are often a factor in the regional transformer market, lead times are also improv-
ing. Generally speaking, the wider the global reach of the company, the more efficiently it can transport its offerings to utilities. In the case of Aggreko, a worldwide fleet of around 13,500 generators – with a total of 5,600MW of operating capacity – combined with a strong network of depots, mean that its products can be readily available to potential clients. Extra investment over the last 12-18 months has improved leadtimes for Kaeser Kompressoren, an approach that has also been assisted with technological advancements that allow customers to monitor their installations on a 24-hour basis. There are even computer-controlled management systems available that can send text messages to a mobile phone providing operational status. And that need for constant updates as to operational status is absolutely vital. “A 3mm hole in a compressed air network for example, can cost a customer US$6,900 per year in electricity costs,” explains Briden. “This is a substantial amount and in most cases the customer is unaware such losses are taking place. It is our duty to continually educate clients as to the proper use and up-keep of their compressed air systems.”
“A 3mm hole in a compressed air network can cost a customer US$9,600 a year in costs”
Carl Briden, director at Kaeser Kompressoren.
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GENERATORS AND COMPRESSORS
CASE STUDY Aggreko’s Phil Burns outlines ines a recent company mpany success story ry
“Aggreko was able to deliver and install a generator within just a few hours”
“In June, the British ritish Trade Office was commissioned mmissioned by British airline BMI MI to host an anniversary reception ception to celebrate the first anniversary of the company’s y’s operations in the he Eastern Province ce of Al Khobar, Saudi Arabia. With over 100 0 Aggreko Middle East managing guests expected, d, director Phil Burns. a sophisticated
and sound system was lighting an place to ensure that the put in plac made an impression. event mad However, only three hours before the evening was due to begin, tthe British Trade Ofdiscovered that the power fice discov distribution panel was unable distribut handle the amount of to han power needed to operate system. the sy need of a fast solution, In n Aggreko was called in to Aggr
help provide sufficient power to ensure the lighting and sound would function at optimum capacity; the alternative would have been to cancel the whole evening. Having a base in the region and a reputation for being able to supply efficient and reliable power at short notice, Aggreko was able to deliver and install a generator within a few hours – just in time for the reception starting. The evening was a resounding success and Aggreko’s on the ground support and quick response time ensured that guests were completely unaware of the question mark that had hung over their evening a few hours before.”
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KAESER KOMPRESSOREN FZE P.O. Box 17485 • Jebel Ali Free Zone • Dubai • United Arab Emirates Tel.: 00971/4 - 8838363 • Fax: 00971/4 - 8838324 • E-Mail: info.dubai@kaeser.com
January 2010
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Utilities Middle East 25
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PIPE SECTOR FOCUS
Circuit balancing: Improving HVAC system operations David Hudson says balancing should be integrated into commissioning
M
any building managers would agree that the symptoms of indoor climate problems most often surface as complaints from tenants. Living or working spaces are too cold in winter, too hot in summer or a combination of both extremes. ‘Fixes’ to HVAC systems often prove both costly and ineffective. For example, the resetting of a workplace HVAC system startup time from 7:30am to 5:30am leads to a plant operating at capacity two additional hours per day. This equates to a 25% increase in energy consumption, cancelling any energy savings that night setbacks are designed to achieve. Additional consequences include increased wear on pumps and HVAC components and reduced control-valve authority. Indoor temperature and climate problems are not typically caused by control malfunctions or sizing errors. Often, they can be traced to incorrect flow rates attributable to improper terminal-unit balancing. Engineers normally design HVAC systems with excess capacity in mind, so that the ability to provide necessary heating or cooling energy is present. Transferring that energy to terminal units and air-handling units (AHUs) is the challenge. Therefore, the key to HVAC-system effectiveness and efficiency is properly controlled flows from production and delivery units to terminals. Balancing valves maintain flow conditions so that control valves may function properly, providing correct flows to the heat transfer coils, which results in the correct output of energy to a space.
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Unwanted temperature variations can be resolved through proper balancing.
HVAC-system flows are dynamic, changing throughout a typical 24 hour period. Because of heat gain from the sun and changes in building occupancy, the demand for heating and cooling varies, not only throughout the day and night, but also by building sector. An effective and efficient HVAC system must provide correct energy output when and where required, and proper Hydronic balancing is the key to proper performance in the most cost-effective way. Circuit balancing is essential to ensuring that heating and chilledwater systems deliver correct flows to all terminal units in an HVAC circuit. In an unbalanced system, sectors of a building have underflow or overflow conditions that impact control-valve authority and therefore indoor climate. For instance, areas closest to an energy-production and delivery source could receive excess flow, resulting in excessive heating or cooling. On the other
hand, areas furthest from an energy-production and delivery source could receive insufficient flow, resulting in inadequate heating or cooling. For every single degree temperature is increased above 20°C there is an 8% increase in heating costs, whilst each and every degree of cooling below 23°C adds on 15% to costs. By properly applying circuit balancing techniques to each balancing valve it is possible to achieve proper balance throughout a system so that all circuits receive specified design
flows for optimal performance. When pumps, chillers and other components operate at the lowest possible load, there is less wear and tear, longer life, and lower energy and maintenance costs. In addition to providing a comprehensive record of specified and actual flows, circuit balancing helps simplify the setup and monitoring of control equipment. This reduces capital costs, as well as the time needed for commissioning. Far too many buildings are plagued by temperature variations that can lead to tenant complaints, high energy consumption and increased operating expenses. In most cases, these can be easily resolved through proper balancing of the heating or cooling system in conformance with original specifications. In addition to ensuring occupant comfort and minimising energy and operating costs, effective circuit balancing can help determine the causes of improper heating and cooling. Therefore a comprehensive circuit balancing programme should be integrated into any commissioning to save time and energy and to improve the longterm value of the building.
Expert analysis: David L. Hu Hudson is a senior product engineer fo for Victaulic. He is a practismecha ing mechanical engineer with more than 26 years of experience. He can be reached at d dhudson@victaulic.com
January 2010
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Utilities Middle East 27
PROJECTS
UTILITIES PROJECT TRACKER Information is supplied by Ventures Middle East. Tel: +971 2 622 2455. URL: www.ventures-uk.com MIDDLE EAST
Project Title
Client
Consultant
Main Contractor
Value / Value Range (US$. Mn)
Project Status
Project Type
Not Appointed
106
EPC Bid
Power Transmission
National Contracting Company
114
project under construction
Power Plant
Doosan Heavy Industries & Const. Company / Saudi Berkefeld Filter (Witco)
245
project under construction
Desalination Plant
SAUDI
Shouaiba-2 Substation Namera North Overhead Transmission Line
Saudi Electricity Company (SEC)
Tabouk Power Plant
Saudi Electricity Company
National Engineering Services Pakistan (Nespak)
Desalination Plant in Jeddah - Phase 3
Saline Water Conversion Corporation (SWCC)
Kuljian Engineering Corporation
10J Substation & 101 Satellite Substation in Yanbu
Royal Commission for Jubail and Yanbu (RCJY)
Not Appointed
150
EPC Bid
Substation
Princess Noura Bin Abdulrahman University - High Voltage Substation
Ministry of Higher Education / Ministry of Finance
ABB Contracting Co. / Al Fanar Contracting
167
project under construction
Substation
Yanbu IWPP
Marafiq/SWCC
Not Appointed
4000
project under design
Power and Desalination Plant
King Abdullah Economic City (KAEC) - Power Grid Package
Emaar Middle East Properties
Siemens
400
project under construction
Substation
Power and Water Plant in Ras Maaden/Rio Tinto Alcan Al Zour
Not Appointed
2500
project under design
Power & Desalination Plant
Substations 9024 and 8183/8184
Saudi Electricity Company (SEC)
ABB Contracting Co., Saudi Arabia
120
project under construction
Substation
Ras Al-Zour IWPP
Saline Water Conversion Corporation (SWCC)
Not Appointed
3,000
EPC Bid
Power & Desalination Plant
Captive Power Plant in JEC
Saudi Binladin Group / CHALCO / MMC Corporation Berhad
CPI Power Engineer
2000
project under construction
Power Plant
480 MW Expansion of Jeddah PP3 - Stage 2
Saudi Electricity Company (SEC)
Not Appointed
250
project under study
Power Plant
PP11 Power Plant in Riyadh
Saudi Electricity Company (SEC)
Not Appointed
2133
EPC Bid
Power Plant
1200 MW Thermo-electric Power Plant in Rabigh
Saudi Electricity Company (SEC)/ACWA Power International/Korea Electric Power Corporation (Kepco)
Not Appointed
2500
project in its concept stage
Power Plant
Mohammed A.Turki Mott MacDonald
Fichtner
UAE
Desalination Plant in Jafza
Jafza/Palm Water
GHD
Not Appointed
250
EPC Bid
Desalination Plant
Hassyan Complex - Station P - Phase 2(P2)
Dubai Electricity and Water Authority (DEWA)
Lahmeyer International, Abu Dhabi
Not Appointed
3000
EPC Bid
Power and Desalination Plant
28 Utilities Middle East
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January 2010
www.utilities-me.com
PROJECTS
Fujairah 2 (F2) IWPP
ADWEA/ Marubeni Corporation/ International Power
Desalination Plant near Hamriyah Free Zone
Alstom Power / Sidem
3,000
project under construction
Power and Desalination Plant
Sharjah Electricity and Water Authority (SEWA)
Aqua Engineering, Techton Engineering & Construction
122
project under construction
Desalination Plant
General Utility Plant Expansion at Ruwais
Abu Dhabi Oil ReďŹ nery Company (Takreer)
Not Appointed
500
EPC Bid
Power Plant
Power and Desalination Complex-M Station
Dubai Electricity and Water Authority (DEWA)
Doosan / Fisia Italimplanti
2,693
project under construction
Power and Desalination Plant
Nuclear Power Plant in Abu Dhabi
Abu Dhabi Water and Electricity Authority / Emirates Nuclear Energy Corporation
Not Appointed
41000
EPC Bid
Power and Desalination Plant
Five 132/11 kV & One 132/33 kV Substations in Dubai
Dubai Electricity and Water Authority (DEWA)
Emirates Trading Agency (ETA), Dubai
225
project under construction
Substation
Fichtner
Fichtner
KUWAIT
Al Zour Power Plant Expansion
Ministry of Energy (Electricity & Water)
Parsons Brinckerhoff
Not Appointed
3,700
project under design
Power and Desalination Plant
Shuaiba Power & Desalination Plant
Ministry of Energy (Electricity & Water)
Parsons Brinckerhoff
Mitsui Company
1,300
project under construction
Power and Desalination Plant
Shuwaikh Desalination Plant
Ministry of Energy (Electricity & Water)
Doosan Heavy Industries & Construction Kuwait
320
project under construction
Desalination Plant
Al Ahlia Switchgear Company
66
project under construction
Substation
Mitsui & Company
3,700
project under construction
Power and Desalination Plant
Five 132/11 kV Substations at Ministry of Energy (ElecJaber Al-Ahmed tricity & Water) QATAR
Ras Laffan C Independent Water & Power Project
Qatar General Electricity & Water Corporation/ Qatar Petroleum (QP)/Suez Kema Energy International (Belgium)/Mitsui & Company, Japan
Captive Power Plant at Mesaieed
Qatalum
Mott MacDonald
GE / Doosan Heavy Industries
1,000
project under construction
Power Plant
Mesaieed A - Power Project in MIC
QEWC/QP/Marubeni
Fichtner
Iberinco
2,000
project under construction
Power Plant
Shandong No.3 Electric Power Construction Corporation,China
750
project under construction
Power and Desalination Plant
OMAN
Salalah IWPP
Oman Power and Water Procurement Company / Sembcorp Utilities Pte Ltd /Oman Investment Corporation
BAHRAIN
Independent Water and Power Plant in Addur
Ministry of Finance / Ministry of Electricity & Water / Suez Energy International
Mott MacDonald
Degremont / Hyundai Heavy Industries (HHI)
4000
project under construction
Power and Desalination Plant
Ten 220kV Substations
Ministry of Electricity & Water, Bahrain
Electricity Supply Board InternationalIreland (ESBI)
Electricity Supply Board International- Ireland (ESBI)
105
project under construction
Substation
www.utilities-me.com
January 2010
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Utilities Middle East 29
TENDERS
Tender activity To add a tender to our listing, email details to lutfi.qaraman@itp.com Visit constructionweekonline.com for the latest tender information
UME provides free access to the latest publicly available tender listings from across GCC countries. The tenders included are aggregated from a wide variety of public and private sector sources from across the region. Where possible, tenders include the issuer, name and category of the tender; opening and closing dates; narratives; fees, bonds and contacts
UPGRADING OF THE COMPLETE SCADA SYSTEM IN RQWTS LINES A & B Issuer: Saline Water Conversion Corporation Tender number: RQWTS-SCADA Title: Upgrading of the Complete SCADA System in RQWTS Lines A & B Description: The scope of work includes upgrading of the complete SCADA System, communication system & communication cable in RQWTS Lines A & B. Bond: N/A Tender fee: 5000.00 SAR Closes: Jan 3, 2010 Contact: http://www.swcc.gov.sa
SUPPLY OF ELECTRICAL CABLES FOR MAJAN ELECTRICITY COMPANY IN OMAN Issuer: Majan Electricity Company S.A.O.C Tender number: 344/2009 Title: Supply of Electrical Cables for Majan Electricity Company Description: The scope of work includes supply of electrical cables for Majan Electricity Company in the Sultanate of Oman. Bond: N/A Tender fee: 150.00 OMR Closes: Jan 4, 2010 Contact: http://www.tenderboard.gov.om
NEW 11-KV SWITCHGEAR BUILDING AT THE GHUBRA NORTH 33\11-KV PRIMARY SUBSTATION IN OMAN Issuer: Muscat Electricity Distribution Co. (S.A.O.C) Tender number: 334/2009 Title: New 11-kV Switchgear Building at Ghubra North 33\11-kV Primary Substation Description: The scope of work includes construction of New 11-kV Switchgear Building at 33\11k.V Ghubra North Primary Substation. Bond: N/A Tender fee: 257.00 OMR Closes: Jan 4, 2010 Contact: http://www.tenderboard.gov.om
SUPPLY OF 8 TRANSFORMERS (20 MVA,33/11.5KV) FOR MAJAN ELECTRICITY COMPANY IN OMAN Issuer: Majan Electricity Company S.A.O.C Tender number: 343/2009 Title: Supply of 8 Transformers (20 MVA,33/11.5-kV) for Majan Electricity Company Description: The scope of work includes supply of 8 transformers (20 MVA,33/11.5-kV) for Majan Electricity Company. Bond: N/A Tender fee: 150.00 OMR Closes: Jan 4, 2010 Contact: http://www.tenderboard.gov.om
30 Utilities Middle East
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January 2010
132-KV XLPE CABLE IN SAAD AL-ABDULLA SUBSTATION Issuer: Central Tenders Committee Tender no: 109/2008/2009 Title: -kV XLPE Cable in Saad Al-Abdulla Substation Description: The scope of work includes installation of 132-kV XLPE cable in Saad Al-Abdulla substation. Bond: Applicable Tender fee: 3000.00 KWD Closes: Jan 5, 2010 Contact: Central Tenders Committee - Ministry of Water & Electricity EXPANSION OF AL BATHA OUTLET SUBSTATION Issuer: Ministry of Finance Tender number: 1195 Title: Expansion of Al Batha Outlet Substation Description: The scope of work includes expansion of Al Batha outlet substation. Bond: N/A Tender fee: 1000.00 SAR Closes: Jan 10, 2010 Contact: www.mof.gov.sa CONSTRUCTION OF WATER DISTRIBUTION NETWORK FOR SMALL TOWN Issuer: Public Authority for Electricity and Water Tender no: 335/2009 Title:Construction of Water Distribution Network for
www.utilities-me.com
TENDERS
Small Town Description:The scope of work includes construction of water distribution network for small town in Al-Dakhiliah Region. Bond: N/A Tender fee: 150.00 OMR Closes: Jan 11, 2010 Contact: http://www.tenderboard.gov.om HASSYAN POWER & DESALINATION STATION - WATER INTAKE AND OUTFALL SYSTEM PACKAGE Issuer: Dubai Electricity & Water Authority (DEWA) Tender no: CNE/0114/2008(R) Title: Hassyan Power & Desalination Station - Water Intake and Outfall System Package Description: The scope of work includes construction of water intake channel (onshore and offshore sections), outfall System comprising and outfall chamber means of transporting the discharge offshore, boat house anf boat lifting facilities, and ancillary works, including roads and lighting. Bond: N/A Tender fee: 5000.00 AED Closes: Jan 25, 2010 Contact: The Chairman, Board of Directors Dubai Electricity & Water Authority SUPPLY OF LV XLPE CABLES IN BAHRAIN Issuer: Electricity and Water Authority Tender number: 365/2009/5310 Title: New 11-kV Switchgear Building at Ghubra North 33\11-kV Primary Substation Description: The scope of work includes supply of 70,000 metres of LV XLPE cables aluminum & conductor in Bahrain. Bond: Applicable Tender fee: 50.00 BHD Closes: Jan 14, 2010 Contact: http://www.tenderboard.gov.bh SUPPLY OF MINERAL OIL TRANSFORMER Issuer: Electricity and Water Authority
www.utilities-me.com
Tender no: 341/2009/5310 Title: Supply of Mineral Oil Transformer Description: The scope of work includes supply of Mineral Oil Transformer in Bahrain. The Distribution rating is between 1000 & 1500-KVA. Bond: Applicable Tender fee: 50.00 BHD Closes: Jan 6 2010 Contact: http://www.tenderboard.gov.bh SUPPLY OF 11-KV XLPE CABLE IN BAHRAIN Issuer: Electricity and Water Authority Tender number: 348/2009/5310
KEY CONTRACT
WATER INTAKE AND OUTFALL SYSTEM PACKAGE IN DUBAI DEWA has issued a tender for a water intake and outfall system package at the Hassyan Power and Desalination Station. The scope of work includes construction of water intake channel (onshore and offshore sections), outfall System comprising and outfall chamber means of transporting the discharge offshore, boat house anf boat lifting facilities, and ancillary works, including roads and lighting. The tender number is CNE/0114/2008(R) and there is a tender fee of 5000 AED. This tender closes on January 25, 2010. Contact: The Chairman, Board of Directors Dubai Electricity & Water Authority
Title: Supply of 11-kV XLPE Cable in Bahrain Description: The scope of work includes supply of 200,000 metres of 11-kV XLPE underground cable. Bond: Applicable Tender fee: 50.00 BHD Closes: Jan 13, 2010 Contact: http://www.tenderboard.gov.bh SUPPLY OF 11-KV SF6 RING SWITCHES Issuer: Electricity and Water Authority Tender no: 349/2009/5310 Title: Supply of 11-kV SF6 Ring Switches Description: The scope of work includes supply of 11kV SF6 ring Switches in Bahrain. Bond: Applicable Tender fee: 50.00 BHD Closes: Jan 13, 2010 Contact: http://www.tenderboard.gov.bh SUPPLY OF AIR CIRCUIT BREAKERS Issuer: Electricity and Water Authority Tender number: 350/2009/5310 Title: Supply of Air Circuit Breakers Description: The scope of work includes supply of air circuit breakers ACB or MCCB metal 500A 1-kV, 50 Hz. Bond: Applicable Tender fee: 15.00 BHD Closes: Jan 13, 2010 Contact: http://www.tenderboard.gov.bh SUPPLY OF UNDERGROUND XLPE CABLES IN BAHRAIN Issuer: Public Authority for Electricity and Water Tender no: 335/2009 Title:Supply of Underground XLPE Cables in Bahrain Description:The scope of work includes supply of underground XLPE cables, aluminum and copper. The quantity is 273,500 metres. Bond: Applicable Tender fee: 50.00 BHD Closes: Jan 13, 2010 Contact: http://www.tenderboard.gov.bh
January 2010
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Utilities Middle East 31
QUICK Q&A
PEOPLE METER Local player Brush Transformers Gulf general manager Manu Domen outlines how the firm plans to beat the recession by implementing new policies How is Brush coping with the downturn? Our initial plan was to produce 33kV and 132kV transformers up to a range of 90 MVA. Recently we have upgraded our facility to produce 220 kV transformers upto 150 MVA, for which there also is a big demand within the region. As owners of the Hawker Siddeley transformer technology, this was the logical next step for Brush. Any local competitor would have to partner up with another company to acquire this technology. In addition, in a recent board meeting, it was decided that we would move to 400kV in a few years time, with 315 MVA transformers, and there’s no-one else in the Middle East that can match this. We’ve also been focusing on the service industry. We offer our customers anything from oil sampling, oil testing, site testing, lifetime assessment, refurbishment and complete renewal of transformers. What makes Brush a good proposition for local firms? In the past, all the bigger transformers in the Middle East had originated from abroad. Since we are a local company, we can produce cheaper products and transport is also quick, safe and cheap, particularly true for the refurbishment of transformers. As we’re local, we can put the transformer
32 Utilities Middle East
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January 2010
on a truck, ship it to our factory here in a day, and then repair and have it back to our customers in a very short space of time. We also refurbish transformers; since no-one else can carry out this work locally, it’s our way of proving the quality of our product. Many clients may still have the perception that transformers have to come from overseas, and local products sometimes cause hesitancy, but we’re here to prove that that’s not the case.
What challenges are you seeing in the current market? Decisions are being delayed because of the uncertain market situation but also because of possible financial gain. The fluctuations in the copper price have a lot to do with that. When the price of one tonne of copper goes down from above US$8,000 to below US$3,000 in the span of six months, it is very tempting to delay your projects and renegotiate the price.
“There’s still huge demand in the market; the electricity sector is growing and the oil and gas sector is still positive” How is business currently? It’s been fairly flat recently but we are seeing some signs of change, which might be due to the fact that it’s the year-end and some budgets have been dedicated to certain projects that will be taken on shortly. There are also a number of huge projects in the oil and gas field which are in the process of being awarded. We are expecting a good outcome for 2010 and at the end of the second and the beginning of the third quarter, I see things picking up.
This is what happened earlier this year. Unfortunately we have seen the price go right back up to US$7,000 since then and because there is no copper variation clause in most utility contracts, that leaves us as a manufacturer in a very vulnerable position. Another challenge we see, especially for bigger transformers, is the perception that good quality cannot be produced locally but has to come from Europe or Japan. We are working hard to change this mindset by supplying European quality, pro-
duced right here in Abu Dhabi at local prices. Can you give an example of a recent contract where you overcame challenges to satisfy one of your clients? We pride ourselves that we go the extra mile to satisfy our customers. One local company asked us to check the lifetime of their transformer – the insulation material gets brittle as the polymer material breaks down. In the old days, you would have to examine the insulation paper, but now we have more advanced methods. In this case, our examination showed that there was a need to replace the windings. In the end, the client asked for a new transformer instead, on the condition we would remove and dispose of the old one. What’s the future for the transformer industry in the Middle East region? For me, it’s still bright – there’s still huge demand in the market. The electricity sector in the region is growing, and the oil and gas sector is still looking very positive. we have this beautiful facility in Musaffah which is being underused – and it will be a huge cost benefit for the utilities and industries in the GCC area. www.utilities-me.com
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AREVA T&D. Inventing customer-valued network solutions for an energy-efficient future. www.areva-td.com/contactcentre AREVA T&D - Regional office Near & Middle East 2nd Floor, ACICO Business Park Bldg., Sheikh Rashid Road Port Saeed, P.O. Box 48957, Dubai, U.A.E. Tel: + 971 (0) 4 2929 888 - Fax: + 971 (0) 4 2942 772 nme.contact@areva-td.com
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