meed-logo

line1 line2 line3
SIGN IN / REGISTER

Becht targets Middle East for expansion

2 May 2023

US-headquartered engineering services company Becht is pushing to significantly expand its presence in the Middle East to take advantage of opportunities in the region’s energy sector, according to Chris Van der Beek, director of Becht for Europe, the Middle East and Africa.

“We already have a local agency partner in the UAE and are in discussions with potential agency partners in Saudi Arabia and Oman,” said Van der Beek.

The company has active contracts across the Middle East and expects to win more contracts from existing clients as well as new clients.

In the Middle East and North Africa (Mena) region, Becht is active in the UAE, Qatar, Saudi Arabia, Oman, Iraq, Algeria and Egypt.

“We have grown our services over recent years,” said Van der Beek. “The services we offer have increasing width and depth and we would like our existing clients to use more of our capabilities.

“That is our first focus. Our second focus is adding new clients.”

Long-term agreements

Historically, the company has provided consultancy services to refineries, petrochemical facilities and power stations in the field of engineering solutions and the use of plant equipment, including cranes and other heavy machinery.

Over the years, it has built on this offering to add consultancy services in supply chain optimisation, crude optimisation and margin optimisation.

Becht is now also providing its clients with digital answers and solutions focused on adapting to the global energy transition.

“We provide solutions and build long-term relationships, and with most of our companies, we will have a long-term technical service agreement,” said Van der Beek.

“Under this, we will help them with both small and larger questions as well as small and large projects.”

We believe that, by 2050, there is still going to be oil and gas around as well as a wide range of energy transition projects and this will mean a lot of work for companies like us

Market share

It is possible that Becht’s pursuit of expansion in the Mena region could result in it gaining significant market share in some countries.

It is already well established in North America, with more than 95 per cent of the refineries in the US and Canada on Becht’s roster of clients.

“Our consultancy contracts cover high-value technical engineering work for projects from cradle to grave, whether it is a project that is being developed or a facility that is already operational,” said Van der Beek.

“The clients are normally companies that can run and maintain a facility, but if something happens, such as a process not working optimally or a safety issue, then we can help to investigate that and help with solutions.”

Saudi Arabia is currently Becht’s biggest market in the Middle East in terms of active contracts, followed by the UAE and Oman.

The company mainly works on refining and petrochemical projects, but is also focused on natural gas plants, ammonia facilities and hydrogen projects.

“Our company has a very diverse offering that we believe will take advantage of a lot of growth areas in the region,” said Van der Beek.

“In Saudi, we have two large petrochemical companies as clients and our work includes carrying out engineering work for mechanical and technical improvements for facilities.

“In both cases, the work is focused on an already operational asset. When they run into reliability issues or other types of issues, we are there to assist.

“Often, they don’t have the very specific knowledge that is needed to solve certain projects in-house.

“Sometimes the technology supplier doesn’t even have the knowledge, but we can help them overcome these problems with detailed designs and advice about better equipment and materials to solve problems.”

Skills gap

Much of the engineering work conducted by Becht is done remotely, but it also sends out teams to visit projects and gather data.

The company has around 1,500 specialist consultants, most of whom have experience working as experts for oil and gas majors such as Shell, Exxon, BP and Total.

During 2022 and 2023, there has been a surge in large infrastructure project contract awards in the Mena region, leading to increased demand for skilled engineers.

Last year, more than $30bn-worth of contracts were awarded by oil, gas and petrochemicals producers in the Middle East and North Africa, according to regional projects tracker MEED Projects.

Gulf energy producers and petrochemicals manufacturers have leveraged high oil and gas prices to push through big-ticket projects. Yet project operators and service providers have not fully restored their workforces since laying off people during the pandemic, putting their existing resources under stress.

Van der Beek sees the skills crunch in the Mena region as a big opportunity for his company.

“A lot of companies are struggling to attract new talent to their firms,” he said. “We can supply the expertise and knowledge needed to help their full-time inexperienced staff.

“We can step in and solve problems and we can also help companies by offering coaching and physical training on-site to help people grow their skills.”

With the world population growing and rising standards of living in Asia, we expect increased demand for petrochemical products

Energy sector outlook

Van der Beek believes there will be significant opportunities in both the oil and gas sector and in energy transition projects up to 2050.

“We have been looking at the global situation and the heavy growth in population of 1.7 billion people by 2050 and the speed of the energy transition,” he said.

“We believe that, by 2050, there is still going to be oil and gas around as well as a wide range of energy transition projects and this will mean a lot of work for companies like us.”

Becht expects petrochemicals to be a big growth area in Saudi Arabia over the next decade.

“Amid the energy transition, there is going to be lower demand for fuels, so the molecules will be used for other purposes, and one of the logical ones is chemicals,” said Van der Beek.

“With the world population growing and rising standards of living in Asia, we expect increased demand for petrochemical products.”

Saudi opportunities

Becht expects the Middle East to be either its number one growth region over the mid-term or second after the Asia Pacific.

“Downstream businesses, and the global oil and gas sector in general, are recovering from the Covid-19 pandemic, so there is a lot of growth in different regions, but the Middle East remains specifically important for us,” said Van der Beek.

“If you are driving around Saudi Arabia in the Jubail area, there are tens of kilometres with only refineries and chemical plants. It’s so huge. There is a wealth of opportunities for us in the country.

“However, we don’t see our growth in Saudi as something that will happen overnight. We want to grow our relationships there and we intend to take this slowly and prove ourselves through the quality of our work.

“We are going to invest time and resources and grow in a controlled way to maintain that quality.”

Becht hopes to sign several broad technical service contracts with companies in Saudi Arabia in the coming months.

The areas where it hopes to sign the contracts include process support, engineering support, asset integrity and turnaround optimisation.

Van der Beek says his company is not actively investing resources in winning new work across the whole of the Mena region, although the firm is willing to evaluate potential projects in most markets.

“The volume of activity that we are seeing in countries such as Saudi Arabia means that we have to choose carefully which markets to invest our business development resources in,” he said.

According to Van der Beek, Becht sees its expansion strategy in the Middle East as a marathon rather than a sprint. It is focusing on competing with other companies on the high standards that it delivers, rather than putting all of its efforts into offering the lowest bid prices.

He believes that his company’s focus on quality ensures that existing clients become repeat customers and helps to form a solid foundation for sustainable growth.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10804025/main.gif
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Oman expands grid connectivity

    10 December 2023

    Oman’s power and water sector has awarded an annual average of approximately $1.5bn-worth of contracts over the past 11 years – a relatively low value compared to the total awarded every year by some of its GCC neighbours.

    However, 2023 can still be considered a good year for the sultanate, as contracts worth an estimated $1.2bn have been awarded.

    This is an improvement on the performance of the previous two years, which saw very limited project activity within the sector, with contract awards valued at just $104m in 2021 and $244m in 2022.

    Having adopted a policy to not procure further gas-fired thermal power plants, Oman awarded the contracts to develop its second and third utility-scale solar photovoltaic (PV) plants in early 2023.

    The Manah 1 and 2 solar PV independent power projects (IPPs) each have a capacity of 500MW. Wadi Noor Solar Company, comprising France’s EDF Renewables and South Korea’s Korea Western Power Company (Kowepo), will deliver and maintain the Manah 1 solar IPP project for 20 years.

    Another team, comprising Singapore’s Sembcorp Industries and China-headquartered Jinko Power Technology, will develop the Manah 2 IPP scheme. The country’s first utility-scale solar project, Ibri 2, became operational in 2021. 

    Oman’s Ministry of Regional Municipalities & Water Resources also awarded a $108m contract for the construction of a flood protection dam in Wadi Ajay Gorge in Muscat in early 2023. The rest of the awarded contracts comprise water and power transmission pipeline projects across the sultanate.

    Demand growth

    Nama Power & Water Procurement Company (PWP), formerly Oman Power & Water Procurement Company (OPWP),  expects peak electricity demand for the main interconnected system (MIS), the sultanate’s main electricity grid, to grow by an average of 3.54 per cent annually from 2022 to 2029, reaching 8,350MW at the end of the forecast period.

    Most of this growth is expected to occur in the near term, as the economy recovers from the effects of the Covid-19 pandemic, according to PWP’s most recent Seven-Year Statement, which covers the years 2023-29. It is also higher compared to the 2.5 per cent average annual peak demand growth rate seen between 2015 and 2022.

    PWP’s low-case forecast scenario shows an average annual peak demand growth of 1.3 per cent, with the base growing from 6,628MW to just over 7,200MW. A high-case scenario, on the other hand, indicates an annual demand growth of 5.2 per cent, which can drive the demand to reach 9,430MW.

    Annual peak demand growth in the smaller Dhofar grid is expected to average 5 per cent between 2022 and 2029.

    The first phase of Oman’s North-South Interconnection project, known as Rabt, became operational in November. The 400-kilovolt (kV), 670-kilometre (km) project required an investment of about $966m.

    The first phase of Oman’s North-South Interconnection project, known as Rabt, became operational in November

    The project enables the MIS, serving the northern half of the Oman grid, to connect with Nihada in Al-Dhahirah Governorate and Duqm Special Economic Zone (SEZ) in Al-Wusta Governorate.

    Al-Wusta offers an optimal location for solar and wind projects, which the country aims to develop as part of its green energy ambitions.

    Also part of Rabt's first phase, the isolated networks of Petroleum Development Oman and the Rural Areas Electricity Company (Tanweer) in Duqm SEZ, have been interconnected.

    A second phase is being planned for Rabt. To be launched later this year, it will comprise a 500km, 400kV transmission line from Duqm to Dhofar.

    Water requirements

    Peak water demand in the MIS is expected to increase by an average of 2 per cent annually between 2022 and 2029, while peak water demand in Dhofar is expected to grow by an average of 7 per cent a year.

    To meet the expected demand rise in the MIS, several independent water projects are being developed or planned. These include the Barka 5 scheme, which has a capacity of 100,000 cubic metres a day (cm/d) and is expected to come online in 2024. Ghubrah 3, which has three times as much capacity, is expected to be operational two years later.

    A third project, a replacement capacity for the Barka zone of about 102,000 cm/d, is also expected to be added in 2024.

    Future projects

    In addition to the second phase of Rabt, Oman is in the early procurement phase of several solar and wind projects, in line with meeting demand growth and replacing expiring contracted capacity.

    The power and water purchase agreement for the gas-fired Barka 2 independent water and power facility, for instance, expires in 2024, while the contract for the Barka 3 IPP expires in 2028.

    KPMG Lower Gulf, a subsidiary of the Netherlands-based consultancy company, has been selected to provide financial advisory services to Nama PWP for the Ibri 3 solar IPP, which will have a capacity of 500MW. Ibri 3, along with the planned 100MW Jalaan Bani Bul Ali wind power project, will cater to the MIS.

    Another key scheme being planned to connect to the MIS is Oman’s first waste-to-energy plant in Barkah. When complete, the facility is expected to treat 4,500 tonnes of municipal waste a day, produce 130MW-150MW of energy, and reduce the carbon footprint of Oman's landfills by 1.3 million tonnes annually.

    For the Duqm grid, a 100MW wind IPP is being planned, in addition to a potential concentrated solar power plant. These plants are expected to become operational in 2026 and 2028, respectively. A 100MW wind project is also being planned for Dhofar, although there has been no fixed target for when it is expected to become operational.

    In May, it was also announced that Oman Electricity Transmission Company is planning a second link to the GCC grid. The planned 400kV power transmission link is scheduled to start operations in the first quarter of 2026.

    Hydrogen hubs

    There are major plans to develop green hydrogen hubs in Duqm and Dhofar, in line with Oman's ambition to produce up to 1.25 million tonnes a year of green hydrogen by 2030.

    The proposed projects will integrate renewable energy plants that will supply power to the electrolyser plants, which split water into hydrogen and oxygen, as well as the other units of the facilities.    

    The government has so far awarded land concessions to international consortiums looking to develop integrated green hydrogen and ammonia facilities in the country.

    The programme will have a potentially significant impact in terms of Oman’s future gross renewable energy capacity growth, with some of the earliest announced projects requiring several gigawatts of wind and solar power.

    However, since most of the planned projects include captive renewable energy power plants, they will not necessarily affect the Omani utility companies' future capacity procurement plans. 

    On the other hand, water demand may be affected as the electrolysis plants require pure water to be split into hydrogen and oxygen.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11354723/main.jpg
    Jennifer Aguinaldo
  • Oman 500MW solar project secures financing

    8 December 2023

    Oman's Manah 1 solar photovoltaic (PV) independent power producer (IPP) project has signed financing deals worth $302m with France's Societe Generale, the Export-Import Bank of Korea (Korea Eximbank) and Bank Muscat.

    The Manah 1 IPP developers and investors, comprising Korea Western Power Company (Kowepo) and France's EDF Renewables, signed the deal on 6 December.

    According to a local media report citing a Kowepo statement, the Korea Eximbank plans to provide $170m in project financing.  

    A team comprising EDF Renewables and Kowepo started mobilising to construct the 500MW Manah 1 solar IPP project in Oman, as MEED reported in September.

    The solar power plant will span over 7.8 square kilometres in Oman’s Al-Dakhiliyah governorate. 

    The developer intends to deploy over 1 million bifacial photovoltaic (PV) modules mounted on a single-axis tracker system for the plant.

    A project company, Wadi Noor Solar Power Company, has been formed to deliver and operate the project for 20 years.

    The company will work with Australia-headquartered Worley, which has recently been appointed as the owner engineer for the project.

    Oman Power & Water Procurement Company (OPWP) signed the 20-year power-purchase agreements (PPA) for the Manah 1 and Manah 2 solar IPP projects in March this year.

    Both plants are expected to be operational by 2025.

    A team of Singapore’s Sembcorp Industries (Sembcorp) and China-headquartered Jinko Power Technology was awarded the 500MW Manah 2 solar PV IPP contract.

    Manah 1 and 2 were previously named Solar IPP 2022 and 2023.

    To be located 150 kilometres southwest of Muscat, the Manah 1 and 2 solar projects comprise the second utility-scale renewable energy projects to be tendered by OPWP, after Ibri 2, which has been operational since 2021.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11358677/main.jpg
    Jennifer Aguinaldo
  • Masdar and OMV sign green hydrogen agreement

    8 December 2023

    Abu Dhabi Future Energy Company (Masdar) and Austrian energy and chemicals firm OMV have signed a preliminary agreement to partner in the production of green hydrogen for the decarbonisation of industrial processes in OMV’s refineries.

    The non-binding heads of terms (HoT) agreement forms the basis of a joint agreement to develop an industrial large-scale electrolysis plant, which will be powered by renewable energy, Masdar said in a statement on 8 December.

    The statement added that the partners will collaborate to develop the project and plan to make a final investment decision in the second half of 2024.

    The HoT signing follows an initial memorandum of understanding (MoU), which the two parties signed in Abu Dhabi earlier this year.

    The agreement with OMV is a step in the right direction towards building a robust hydrogen value chain and supports Masdar's ongoing aim of 1 million tonnes of green hydrogen per annum globally by 2030, according to Masdar's chief green hydrogen officer, Mohammad Abdelqader el-Ramahi.

    Green hydrogen oasis

    According to MEED data, there are at least 12 known and planned green hydrogen projects in the UAE, with a budget of at least $12bn.

    In addition to the planned $5bn green hydrogen hub planned by Masdar and French utility developer and investor Engie, the other major planned green hydrogen projects in Abu Dhabi involve its largest industrial firms, including Abu Dhabi National Energy Company (Taqa), Emirates Steel, Fertiglobe and Brooge.

    One of these projects, the 150MW green hydrogen-based ammonia production facility planned in Ruwais, is expected to reach a financial investment decision (FID) shortly.

    The UAE's Green Hydrogen Strategy envisages the production of 1.4 million tonnes a year (t/y) of hydrogen by 2031, with green hydrogen accounting for 70 per cent of the target.

    This is expected to increase to 7.5 million t/y by 2040 and 15 million t/y by 2050. 

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11358471/main.jpg
    Jennifer Aguinaldo
  • Sheikh Mohammed inaugurates Dubai CSP plant

    7 December 2023

    Sheikh Mohammed bin Rashid al-Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, has inaugurated the fourth phase of the Mohammed bin Rashid al-Maktoum (MBR) Solar Park in Dubai.

    The 950MW fourth phase of the MBR solar park required an investment of AED15.78bn ($4.34bn).

    It uses hybrid technologies: 600MW from a parabolic basin complex, 100MW from the CSP tower, and 250MW from solar photovoltaic (PV) panels.

    The independent power producer (IPP) project features the tallest solar tower in the world, at 263.126 metres, and a thermal energy storage facility with a capacity of 5,907 megawatt-hours (MWh), the world's largest according to the Guinness World Records.

    The project covers an area of 44 square kilometres. It features 70,000 heliostats that track the sun’s movement. The molten salt receiver (MSR) on top of the solar power tower is the core and the most important part of the CSP plant. It receives solar radiation and turns it into thermal energy.

    The MSR contains over 1,000 thin tubes that enable the absorption of sun rays and their transfer to the molten salt within these tubes.

    The project can power approximately 320,000 residences with clean and sustainable energy. It will reduce carbon emissions by about 1.6 million tonnes annually.

    The completion of the project's fourth phase brings the total capacity of the MBR solar park to 2,863MW so far. The phases and their capacities are:

    • 13MW solar PV phase one: Completed in 2013
    • 200MW solar PV phase two: Commissioned in 2017
    • 800MW solar PV phase three: Commissioned in 2020
    • 950MW hybrid CSP/solar PV phase four: Inaugurated in 2023
    • 900MW solar PV phase five: Commissioned in 2023

    Dewa is aiming for the MBR development to reach 5,000MW of capacity by 2030. It recently awarded the UAE-based Masdar the contract to develop the solar park's sixth phase, which has capacity of 1,800MW.

    Project background

    Dubai Electricity & Water Authority (Dewa) awarded a consortium of Saudi Arabia’s Acwa Power and China's Silk Road Fund the contract to develop a 700MW CSP plant with storage for the fourth phase scheme in November 2017. Since then, the project has been expanded to include a 250MW solar PV component.

    Acwa Power then awarded Shanghai Electric the $3.8bn EPC contract for the hybrid CSP/PV plant in early 2018.

    The project reached financial closure in March 2019. The cost will be met through $2.9bn of debt and $1.5bn of equity.

    According to the project structure, Dewa is to provide $750m, or half of the project equity. Project developers Acwa Power and the Silk Road Fund will provide 51 per cent and 49 per cent, respectively, of the remaining equity.

    The fourth phase project achieved a tariff of 7.3 $cents a kilowatt hour ($c/kWh) for the CSP component and 2.4$c/kWh for the PV capacity, two of the lowest tariffs for CSP and PV solar technology in the world at the time of award.

    Dewa holds a 51 per cent stake in the project company, Noor Energy 1, set up to develop the plant, with Acwa Power and the Silk Road Fund holding the remaining stake. The developer consortium has signed a 35-year power-purchase agreement to supply power to Dubai’s grid.

    Photo: Wam

     

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11354147/main.jpg
    Jennifer Aguinaldo
  • Firms win Saudi Landbridge

    7 December 2023

     

    Register for MEED’s guest programme 

    The team of US-based Hill International, Italy’s Italferr and Spain’s Sener has been awarded the contract to provide project management services for the estimated $7bn Saudi Landbridge project.

    The Landbridge is a rail project that will connect the Red Sea coast of Saudi Arabia in the west and the Gulf coast in the east. It is one of the largest infrastructure projects planned in Saudi Arabia. The scheme is being implemented by the Saudi Railway Company (SAR).

    Project scope

    The project comprises six lines. The first line involves upgrading the Jubail Industrial City internal network, which is currently under construction. It will require 10 kilometres (km) of track to be built.

    The second is the upgrade of the Jubail to Dammam railway line, which is also currently under construction. It will require 35km of track to be built.

    The third line involves the upgrade of the Dammam to Riyadh railway line, with 87km of track to be built. 

    The fourth line, known as the Riyadh bypass, is from the existing network in the north of the city to the south. It is split into two packages: the first has 67km of track, and the second has 35km.

    The fifth line is a link from Riyadh to Jeddah and then on to King Abdullah Port with three stations at Jamuma, Moya and Al-Doadmi. The Riyadh to Jeddah line will have 920km of track, and the Jeddah to King Abdullah Port link will have 146km of track.

    The sixth line is a new 172km line from King Abdullah Port to Yanbu Industrial City.

    There will also be seven logistics centres: Jubail Industrial City Logistics Centre, Damman Logistics Dry Port, a relocated Riyadh Dry Port, King Khalid Airport Logistics Centre in Riyadh, Jeddah Logistics Dry Port, King Abdullah Port Logistics Centre and Yanbu Industrial City Logistics Centre.

    Contractor negotiations

    MEED reported in November that negotiations with the Saudi China Landbridge Consortium that will build the rail link are in the final stages.

    The consortium signed a memorandum of understanding to implement the project on a public-private partnership basis in October 2018. It was formed by SAR and China Civil Engineering Construction Company.

    Al-Ayuni Contracting was named as the local partner for the consortium. Other members include French firms Systra and Thales; Canada’s WSP; Aldhabaan & Partners, the local partner of UK legal consultancy Eversheds & Sutherland; ALG Infrastructure; and Calx Consultancy.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11354086/main.jpg
    Colin Foreman