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• 
  Dubai seeks Warsan sewage treatment plant advisers

  23 October 2024

  

   

  Dubai Municipality has invited engineering consultancy companies to prequalify for a contract to provide advisory services for the planned expansion of the Jebel Ali sewage treatment plant (STP) phases 1 and 2.

  The scope of the consultancy services includes study and preliminary design, tender, construction supervision and handover for the project, which aims to increase the capacity of the two phases of the plant.

  The client expects to receive statements of qualifications from companies by 31 October.

  The expansion and upgrade of the Jebel Ali STP is one of the six packages comprising the $22bn Dubai Strategic Sewerage Tunnels (DSST), which is being procured using a public-private partnership (PPP) model.

  The other package comprises the rehabilitation and expansion of the existing Warsan STP, for which Dubai Municipality sought advisers in January this year.

  The Warsan STP PPP technical advisory scope has been divided into several stages, including a preliminary study,  preliminary and final design, the preparation of tender documents, prequalification and tendering, and construction supervision.  

  DSST packages

  The procurement processes for the two STP packages are being run separately from those for the four tunnels, links and terminal pump stations that make up the $22bn DSST project.

  MEED understands that the tenders for the Warsan and Jebel Ali STP packages are expected to be issued once the DSST project's first four components get under way.

  Under the current plan, the DSST project is broken down into six packages, which will be tendered as PPP packages with concession periods lasting between 25 and 35 years.

  The first package, J1, comprises Jebel Ali tunnels (North) and terminal pump stations (TPS). The tunnels will extend approximately 42 kilometres (km), and the links will extend 10km. 

  The second package, J2, covers the southern section of the Jebel Ali tunnels, which will extend 16km and have a link stretching 46km.

  W for Warsan, the third package, comprises 16km of tunnels, TPS and 46km of links.

  J3, the fourth package, comprises 129km of links.

  J1, J2, W and J3 will comprise the deep sewerage tunnels, links and TPS (TLT) components of the overall project.

  J1, J2 and W will be procured under a design-build-finance-operate-maintain model with a concession period of 25-35 years.

  J3 will be procured under a design-build-finance model with a concession period of 25-35 years. Once completed, Dubai Municipality will operate J3, unlike the first three packages, which are planned to be operated and maintained by the winning PPP contractors.  

  Dubai currently has two major sewerage catchments. The first in Deira is Warsan, where the Warsan STP treats the flow.

  The second catchment is in Bur Dubai, where the wastewater is treated at the Jebel Ali STP.

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  Jennifer Aguinaldo
• 
  Carbon capture path for thermal plants still elusive

  23 October 2024

  

   

  The decarbonisation path for upcoming thermal power plants across the GCC region remains vague, according to industry sources.

  Both clients and utility developers are understood to be exploring options to include carbon capture, utilisation and storage (CCUS) provisions in ongoing and upcoming tenders for developing gas-fired power plants in line with their net-zero carbon emissions targets.

  Two sources said several independent power projects (IPPs) in Abu Dhabi and Saudi Arabia, as well as independent water and power projects (IWPPs) in Qatar and Kuwait, have considered or are considering available options.

  “So far, the only option at the table appears to be that the offtaker and the project company implementing the scheme agree to achieve decarbonisation of a power plant asset at a specific time, mainly by 2049,” one of the sources said. “If not, the international developer reserves its right to leave the project company.”

  Most European and Japanese utility developers and investors aim to achieve net-zero carbon emissions between 2045 and 2050. 

  Regional utilities and offtakers such as Abu Dhabi’s Emirates Water & Electricity Company (Ewec), Saudi Power Procurement Company (SPPC), Qatar’s General Electricity & Water Corporation (Kahramaa), Kuwait’s Ministry of Electricity, Water & Renewable Energy (Mewre) and Bahrain’s Electricity & Water Authority (Ewa) have either thermal IWPP or IPP schemes that are under tender or about to be awarded.

  These entities have specified parameters related to carbon capture or CCUS in their recent and upcoming tenders.

  Commercial viability

  Introducing CCUS in utility assets, particularly for combined-cycle gas-turbine plants (CCGTs), is becoming a high priority for both offtakers and developers. However, there is less certainty on how and when integrating the solution will become commercially viable.

  In a recent interview with MEED, Tomaz Guadagnin, Engie’s managing director for Flex Gen in Asia, Middle East and Africa, said building a power station with CCUS today requires significantly bigger land and capital expense as the asset will require additional gas turbine exhaust systems, among other things.

  As such, “it is an important requirement that predictability of the operation of that product is provided”.

  Guadagnin says it is key for international developers to consider that these factors need to be built into the tariffs so that companies can reach a financial investment decision.

  It is also imperative that developers and offtakers understand what will be done with the captured carbon dioxide.

  “What will be done with the captured CO2, where does it fit in, how is it transported and the work required around that and its utilisation. We still don’t have clear visibility on how these will materialise,” the executive noted.

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  Jennifer Aguinaldo
• 
  Adnoc’s upstream goals drive spending spree

  23 October 2024

  

   

  Abu Dhabi National Oil Company (Adnoc Group) spent close to $22bn last year on upstream projects – mainly on the $17bn Hail and Ghasha sour gas production project – making it one of the best years on record for oil and gas project spending in the UAE.

  While the energy giant may not be able to match its 2023 level of capital expenditure (capex) on oil and gas production projects this year, total capex on upstream oil and gas projects in 2024 is still expected to be steep, as Adnoc strives to attain an oil production capacity of 5 million barrels a day (b/d) by 2027 and become self-sufficient in gas production by the end of this decade.

  In fact, if the Hail and Ghasha gas programme is put to one side, Adnoc has already exceeded last year’s upstream project spending level this year.

  Key offshore projects awarded

  Adnoc Group subsidiary Adnoc Offshore has been a driving force behind upstream project spending in the UAE this year, awarding engineering, procurement and construction (EPC) contracts for projects to increase the oil production potential of the Upper Zakum and Lower Zakum offshore oil field developments.

  Located 84 kilometres (km) offshore in Abu Dhabi, Upper Zakum is the world’s second-largest offshore oil field and fourth-largest oil field. Adnoc Offshore launched the first phase of the programme to raise Upper Zakum’s oil production capacity to 1.2 million b/d in 2019. The initial goal was to increase the field’s output potential to 1 million b/d by 2024, which was later increased to 1.2 million, with the project execution timeline eventually being extended.

  This target is to be achieved through the UZ 1.2MMBD EPC-1 project. In April, Adnoc Offshore awarded the main EPC contract for the project, worth $825m, to UAE-based Target Engineering Construction Company.

  Separately, Adnoc Offshore and its partners in the Lower Zakum concession – located 65km northwest of Abu Dhabi – intend to sustain oil production from the asset at its current level of 450,000 b/d until 2025, and then increase output to 470,000 b/d.

  To this end, Adnoc Offshore awarded the main contract for a project known as the Lower Zakum Early Production Scheme 2 and Proved Developed Producing to Abu Dhabi’s NMDC Energy in the second quarter.

  Onshore project spending

  The onshore business of Adnoc Group, Adnoc Onshore, has also been a major spender this year as it pushes ahead with projects earmarked for its parent company’s 5 million b/d target. In September, Adnoc Onshore awarded a contract, estimated to be worth $900m-$1bn, for a project involving the modification of wells at the Bab onshore oil field development in Abu Dhabi, to boost the asset’s crude production potential.

  Abu Dhabi-based Robt Stone Middle East won the contract for the project, which is the second phase of a campaign by Adnoc Onshore to provide artificial lift to 184 new and existing wells at the Bab field’s seven reservoirs. Providing artificial lift to wells will help improve oil recovery from the reservoirs, sustain an oil production level of 485,000 b/d from the field and increase output beyond 2028.

  Earlier in the year, Adnoc Onshore awarded main contracts worth a total of over $1.5bn for two packages on a project involving the conversion of wells and the installation of associated tie-ins at the South East cluster of oil fields in Abu Dhabi.

  Package three of the project covers the EPC of well tie-ins and other associated structures at the Asab and Sahil oil fields, while package four covers the Shah, Qusahwira and Mender fields. Adnoc Onshore split the scope of work on the packages and appointed two contractors for each package.

  Project capex on the rise

  Adnoc Group’s upstream subsidiaries are expected to award further project contracts before the end of the year in order to stay on top of their targets.

  Adnoc Offshore is set to award a major contract estimated to be worth $2bn for a project to increase production from the Umm Shaif offshore oil field in Abu Dhabi. US-based oil and gas contractor McDermott International is in line to win the main contract for the Umm Shaif Accelerated Development project.

  The project aims to increase the Umm Shaif oil field’s output from about 275,000 b/d at present to 390,000 b/d by 2027, and to sustain that level of production until at least 2036.

  Meanwhile, Adnoc Offshore could also award the main EPC contract for the multibillion-dollar Lower Zakum Long-Term Development (LTDP-1) project by the end of the year. The goal of the project is to raise the asset’s output capacity to 520,000 b/d by 2027 and maintain that level until 2034.

  Contractors submitted technical bids for the Lower Zakum LTDP-1 project in August and are in the process of preparing commercial bids.

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  Indrajit Sen
• 
  Biden leaves a mixed legacy

  23 October 2024

  Commentary
  Edmund O'Sullivan
  Former editor of MEED

  There’s no forecasting the winner of this year’s US presidential poll, but there is one certainty.

  Joe Biden will exit the White House next January and be out of front-line politics for the first time in more than five decades.

  History is rarely kind to presidents after they leave office. It is likely that, in due course, Biden will be remembered most for being the oldest person elected president. And he joins the small group of US presidents forced out of office, as he effectively was.

  Biden’s fans will point to significant domestic achievements, including the decrease in the number of Americans without health insurance for the first time to under 10% of the population. Job growth in Biden’s first three years outperformed any previous president’s and unemployment in 2021-23 was below 4% for the first time since the 1960s. Wage growth has outstripped inflation, which has dropped sharply since hitting almost 10% in the summer of 2022. The stock market has boomed and violent crime is down.

  History is rarely kind to presidents after they leave office

  Biden’s big domestic negative is immigration. The number of encounters at America’s border with Mexico has soared and hit a record of 2.2 million in 2023. 

  Biden’s apologists blame the Republican majority in the House of Representatives for derailing reform legislation that was making its way through the Senate. But worries about immigration damaged his opinion poll ratings.

  In a normal election, nevertheless, a presidential incumbent with this kind of record should have been a shoo-in. It is the main reason Biden resisted pressure to step down even after his cognitive decline was impossible to conceal. He believed he was doing a good job and should have been allowed to stay on.

  Foreign policy

  Outside the US, Biden’s reputation will mainly be shaped by his foreign policy.

  The record there is baleful. The chaos of the withdrawal from Afghanistan in 2021 was followed by a refusal to negotiate with Russia about Ukraine in 2022 and the lamentable failure to constrain Israel since October 2023.

  His Secretary of State Antony Blinken is widely viewed as the worst in US history.

  Reliable friends including Jordan and most of the Gulf Arab states have been alienated, possibly permanently.

  Biden’s legacy is objectively mixed. But that’s no longer his problem.

  The US foreign policy mess will divert much of the initial energy of America’s next president. But the ultimate sadness of Biden’s lifetime of public service is that, whoever wins in November, they will almost certainly blame him for it.

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  Connect with Edmund O’Sullivan on X

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  More from Edmund O’Sullivan:

  > Desperate days drag on
  > The beginning of the end
  > The death of political risk
  > Italy at centre of new reduced Europe
  > US foreign policy approach remains adrift
  > Rainmaking in the world economy
  > New shock treatment for Egypt’s economy
  > Syria’s long march in from the cold
  > Lebanon’s pain captured in a call from Beirut
  > Troubled end to 2023 bodes ill for stability

  ---

  

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  Edmund O’Sullivan
• 
  Jubail-Buraydah water pipeline decision imminent

  23 October 2024

  

   

  Saudi Water Partnership Company (SWPC) is expected to announce the bid results for a tender to develop and operate Saudi Arabia’s second independent water transmission pipeline (IWTP) project, which links Jubail in the kingdom’s Eastern Province and Buraydah in the Qassim region.

  According to a source familiar with the project, relevant authorities “are reviewing the bids and a decision should come within at least a month”.

  The planned Jubail-Buraydah IWTP is a 587-kilometre (km) pipeline that can transmit 650,000 cubic metres a day of water.

  According to SWPC, the teams that submitted proposals for the contract in August are: 

  • Aljomaih Energy & Water (Jenwa, local) / Nesma Company (local) / Buhur for Investment Company (local)
  • Vision Invest (local) / Abu Dhabi National Energy Company (Taqa, UAE)

  The Jubail-Buraydah IWTP project is larger than the kingdom’s first IWTP linking Rayis and Rabigh, which a consortium including the local Alkhorayef Water & Power Technologies Company and Spain’s Cobra Instalaciones y Servicios will develop and operate at a cost of SR7.78bn ($2bn).

  SWPC issued the request for proposals for the Jubail-Buraydah IWTP scheme to the prequalified bidders in October last year.

  The state water offtaker qualified 22 companies to bid for the contract in April 2022. 

  The transaction advisory team for the client comprises the US/India’s Synergy Consulting as financial adviser and the local Amer Al-Amr and Germany’s Fichtner Consulting as legal and technical advisers, respectively.

  SWPC’s obligations under the water transfer agreement will be guaranteed by a credit support agreement entered into by the Finance Ministry on behalf of the Saudi government.

  The project is part of the kingdom’s National Water Strategy 2030, which aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90% of national urban supply, to reduce reliance on non-renewable ground sources.

  Related read: SWPC focuses on desalination and sewage plants

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  Jennifer Aguinaldo