meed-logo

line1 line2 line3
SIGN IN / REGISTER

Saudi water begins next growth phase

10 March 2023

 

Saudi Arabia’s National Water Strategy 2030 continues to drive investments in the kingdom’s water desalination, treatment and distribution sector.

The strategy aims to reduce the water demand-supply gap and ensure desalinated water accounts for 90 per cent of the national urban supply to reduce reliance on non-renewable ground sources.

The need to boost the security of supply amid rising demand, volatile costs and increased compliance with sustainability goals is also driving project activity – particularly in terms of using more energy-efficient technologies to convert seawater into potable water – as well as improving storage capacity.

As of March, an estimated 2.66 million cubic metres a day (cm/d) of water desalination capacity is under construction by the main water utility provider Saline Water Conversion Corporation (SWCC) and state water offtaker Saudi Water Partnership Company (SWPC). 

At least a further 2.4 million cm/d of capacity is under procurement using both the independent water producer (IWP) model, mainly through SWPC, and the engineering, procurement and construction (EPC) model, primarily via SWCC. 

Following the award of successive IWP contracts in 2019-20, SWPC paced the award of new contracts and also tendered new jobs in 2021-22.

As in most sectors and geographies, the Covid-19 pandemic and war in Ukraine impacted project finance costs and inflation in Saudi Arabia, both particularly relevant to IWP projects.

New developments in the latter part of last year and the first few months of 2023, including the imminent award of the contract to develop the Rabigh 4 IWP, indicate that SWPC is reestablishing its projects momentum.

Similarly, there has been increased activity in water desalination EPC projects being procured by SWCC, such as the proposed seawater reverse osmosis (SWRO) facilities in Shuaibah and Yanbu, which have a combined capacity of over 1 million cm/d.

These are in addition to the under-construction Jubail 2 SWRO plant, with a capacity of 1 million cm/d, and the 400,000 cm/d Shuqaiq 1 SWRO facility, whose main contracts were awarded in 2021 and 2020, respectively.

Along with meeting rising demand, these projects address the decarbonisation requirements of Saudi Arabia’s water sector, which the kingdom’s pledge last year to reach net-zero carbon emissions by 2060 has made more urgent.

This drive is highlighted by the Shuaibah 3 IWP project, for which a team led by Riyadh-headquartered utility developer Acwa Power won the directly-negotiated contract in 2022.

The 600,000 cm/d SWRO plant will replace the existing multi-stage flash (MSF)-based desalination unit that is being decommissioned in 2025 at the existing Shuaibah 3 independent water and power project (IWPP).

The Shuaibah 3 project was the lone IWP contract awarded by SWPC last year.

The same carbon emissions reduction incentive is driving the Yanbu 2 SWRO project. According to SWCC, the project aligns with improving the environmental impact of the desalination water unit of Yanbu phase 2.

Power & Water Utility Company for Jubail & Yanbu (Marafiq) owns the Yanbu 2 integrated water and power desalination plant, which came onstream in 2015. Like the Shuaibah 3 IWPP, the facility’s desalination unit utilises the older, energy-intensive MSF technology.

Saudi Arabia reinvigorates power sector

Other water PPP projects 

The procurement processes are proceeding simultaneously for several independent sewage treatment plants (ISTP), water transmission pipelines and water reservoir facilities being overseen by SWPC across Saudi Arabia.

SWPC tendered the first scheme under the third round of its ISTP programme in November. The Al-Haer ISTP will have a design capacity of 200,000 cm/d.

The tender is also expected in the first half of the year for the two other schemes under batch three, the Riyadh East and Khamis Mushait ISTP schemes.

At least five other ISTP projects are in the planning stage. 

In November, the Taif ISTP scheme, one of the first-round ISTP projects awarded in 2019, entered commercial operation. 

SWPC has received three bids for its first water transmission pipeline public-private partnership (PPP) project, which links Rayis in Medina to Rabigh in Mecca, with prequalification under way for three similar schemes.

Bids are due in April for the contract to develop the kingdom’s first independent strategic water reservoir (ISWR) project. The Juranah ISWR project will be implemented in Mecca, using a build, own, operate and transfer model. The project includes a water reservoir and associated infrastructure and facilities.

It supports Saudi Arabia’s goal to increase municipal water storage capacity to an average of seven days by 2030. In addition, the government aims to increase water storage capacity to an equivalent of 20 days of Hajj demand in Mecca and 40 days of Hajj demand in Medina by 2022. 

Two other IWTP schemes are planned for Mecca under SWPC’s 2020 seven-year planning statement.

Wastewater treatment

Over the past year, the kingdom’s chief wastewater collection and treatment firm, National Water Company (NWC), has tendered a series of contracts across governorates and provinces.

They include contracts for the construction of networks and pumping stations in Aziziyah in Mecca and other areas in Al-Khobar; three lifting stations and ejection lines with diameters of up to 700mm serving different areas in Jubail; and a sewage project in the King Fahd suburb in the Eastern Province and adjacent schemes west of Abu Hadriya Road in Dammam.

Requests for proposals (RFPs) have also been issued to complete sewage facilities in Al-Khafji governorate, West Safwa and Fayhaa.

These projects are part of NWC’s five-year, SR108bn ($29bn) investment plan for the kingdom’s water infrastructure. The latest five-year plan allocates an estimated SR39bn to Mecca, SR16bn to the Eastern Province and SR14.2bn to Riyadh.

The privatisation of NWC’s sewage treatment plant network is also being undertaken in parallel with improving its underlying infrastructure.

Under long-term operation and management (LTOM) agreements, private sector companies can bid to operate and upgrade water treatment plants.

The first package, for Mecca, was awarded in September 2022 to a team of the local Miahona and Thabat Construction Company. The rehabilitate-operate-transfer scheme is for 10 years and is valued at SR392m. Eight other packages are expected to be tendered under the LTOM programme.   

MEED's April 2023 special report on Saudi Arabia also includes:

> CONSTRUCTION: Saudi construction project ramp-up accelerates

> UPSTREAM: Aramco slated to escalate upstream spending

> DOWNSTREAM: Petchems ambitions define Saudi downstream

> POWER: Saudi Arabia reinvigorates power sector

> BANKING: Saudi banks bid to keep ahead of the pack

https://image.digitalinsightresearch.in/uploads/NewsArticle/10660701/main.jpg
Jennifer Aguinaldo

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

Click here to register
Exclusive from Meed
Related Articles
  • Team offers $c1.29/kWh for 2GW Sadawi solar IPP project

    21 October 2024

    A developer team that includes UAE-based Abu Dhabi Future Energy has submitted the lowest bid for a contract to develop the 2,000MW Al-Sadawi solar independent power project (IPP) in Saudi Arabia.

    The consortium, which includes South Korea's Korea Electric Power Corporation (Kepco) and China's GD Power Development, submitted a levelised cost of electricity (LCOE) of hals 4.847 ($c 1.29) a kilowatt-hour for the contract to develop the scheme, which is located in Eastern Province.

    The second lowest bidder is a team that includes China's SPIC Huanghe Hydropower Development and France's EDF Renewables, which offered to develop the project for $C1.31/kWh.

    Saudi Power Procurement Company (SPPC) received six proposals from companies for the contracts to develop and operate four solar photovoltaic (PV) IPP projects in Saudi Arabia in August.

    The projects, which have a total combined capacity of 3,700MW, are being tendered under the fifth procurement round of the kingdom's National Renewable Energy Programme (NREP).

    According to SPPC the lowest and second-lowest bidders in the remaining schemes under NREP round five are:

    Al-Masaa solar IPP (Hail): 1,000MW

    • L1: SPIC/EDF Renewables (France): $c 1.36/kWh
    • L2: AlJomaih Energy & Water (local) / TotalEnergies Renewables (France): $c 1.40/kWh

    Al-Hinakiyah 2 solar IPP (Medina): 400MW

    • L1: SPIC/EDF: $c 1.51/kWh
    • L2: Masdar/Kepco/Nesma:  $c 1.57/kWh

    Rabigh 2 solar IPP (Mecca): 300MW

    • L1: AlJomaih Energy & Water / TotalEnergies Renewables: $c 1.78/kWh
    • L2: Masdar/Kepco/Nesma: $c 1.89/kWh

    Saudi utility developer Acwa Power was not among the 23 companies that were prequalified to bid for the fifth round of NREP projects.

    US/India-based Synergy Consulting is providing financial advisory services to SPPC for the NREP fifth-round tender. Germany's Fichtner Consulting is providing technical consultancy services.

    The round five solar PV IPPs take the total capacity of publicly tendered renewable energy projects in Saudi Arabia to over 10,300MW. Solar PV IPPs account for 79%, or about 8,100MW, of the total capacity.

    Four wind IPPs, one of which has yet to be awarded, account for the remaining capacity.

    SPPC is procuring 30% of the kingdom's target renewable energy by 2030. Saudi sovereign wealth vehicle the Public Investment Fund is procuring the rest through the Price Discovery Scheme. The PIF has appointed Acwa Power, which it partly owns, as principal partner for these projects.

    The Saudi Energy Ministry recently said that the kingdom plans to procure 20,000MW of renewable energy capacity annually, starting this year and until 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12768211/main.jpg
    Jennifer Aguinaldo
  • Ashghal tenders sewerage works

    21 October 2024

    Qatar’s Public Works Authority (Ashghal) has issued a tender for the construction of the remaining works for two packages of the Al-Kheesa foul sewer network.

    According to Ashghal's website, the project packages are called C2018/7 and C2017/118.

    It issued the tender on 9 October and expects to receive bids by 10 November. Asghal set the bid bond for the contract at QR1.7m ($467,000).

    MEED understands the project is located in the Al-Wajba area and is expected to be awarded in March 2025.

    It is one of the most recent infrastructure packages tendered by the authority, which oversaw the multibillion-dollar Local Roads and Drainage Programme (LRDP) in the run-up to the state's hosting of the Fifa World Cup in 2022.

    LRDP includes more than 200 road and drainage schemes worth an estimated QR53.2bn ($14.6bn).

    In September, Ashghal issued a tender for the construction of a road network in the Izghawa and Al-Themaid areas in the northwest of Doha.

    The project involves the construction of a single- and dual-carriageway road network in the area. The overall project is being procured in two work packages.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12767589/main1835.jpg
    Jennifer Aguinaldo
  • Saudi Arabia to award 10.9GW of generation capacity

    21 October 2024

     

    Principal buyer Saudi Power Procurement Company (SPPC) is expected to award the contracts to develop four gas-fired power plants and four solar photovoltaic (PV) projects over the next few weeks.

    MEED understands the intention is to announce the preferred and reserved bidders for each of the contracts, possibly by late October or early November.

    SPPC received six proposals from companies for the contracts to develop and operate four solar PV independent power producer (IPP) projects, which have a total combined capacity of 3,700MW, in August.

    The project contracts were tendered under the fifth procurement round of the kingdom's National Renewable Energy Programme (NREP).

    According to industry sources, the companies that submitted bids for the four PV contracts include:

    • EDF Renewables (France) / Etihad Water & Electricity (UAE) / SPIC Huanghe Hydropower Development (China)
    • Masdar (UAE) / Nesma Renewable Energy (local) / Korea Electric Power Corporation (South Korea)
    • Jinko Power (Hong Kong) / Saudi Electricity Company (local)
    • Aljomaih Energy & Water (Jenwa, local) /  Total Energies Renewables (France)
    • Engie / Kahrabel (France/ UAE)
    • Alfanar Company (local)

    The following solar PV projects and their capacities make up round five of the NREP:

    • Al-Sadawi solar IPP (Eastern Province): 2,000MW
    • Al-Mas solar IPP (Hail): 1,000MW
    • Al-Hinakiyah 2 solar IPP (Medina): 400MW
    • Rabigh 2 solar IPP (Mecca): 300MW

    Meanwhile, SPPC received bids on 21 August for the contracts to develop and operate four combined-cycle gas turbine (CCGT) power generation plants in Saudi Arabia with a total combined capacity of 7,200MW.

    The four IPP projects, each with a generation capacity of 1,800MW, are:

    • Remah 1
    • Remah 2
    • Al-Nairiyah 1
    • Al-Nairiyah 2

    Remah 1 and 2, previously known as PP15, will be located in Saudi Arabia’s Central Region, while Al-Nairiyah 1 and 2 will be in the Eastern Region.

    According to sources close to the projects, the teams that submitted bids to develop and operate the two CCGT IPPs are:

    • Abu Dhabi National Energy Company (Taqa, UAE) / Jera (Japan) 
    • Acwa Power (local) / Korea Electric Power Corporation (South Korea) / Saudi Electricity Company (local).
    https://image.digitalinsightresearch.in/uploads/NewsArticle/12767412/main1232.jpg
    Jennifer Aguinaldo
  • Khazna expects to build more 100MW-scale data centres

    21 October 2024

     

    Register for MEED's 14-day trial access 

    The 100MW artificial intelligence (AI)-enhanced data centre being built in the UAE's northern emirate of Ajman is not the last for UAE-based data centre and cloud services provider Khazna Data Centres.

    "In the near future, we will be announcing other projects on the same scale or larger than the Ajman data centre," Gregory Jasmin, the firm's senior director of business development strategy, tells MEED.

    The executive says the 100MW data centre, once completed, makes Khazna Data Centres "by far the largest data centre developer and operator in the entire Gulf region".

    MEED previously reported that London-headquartered construction firm Laing O'Rourke had started construction on Khazna's latest data centre project in Ajman.

    The new facility is expected to cost about AED1bn ($272m) and be completed within 15 months. Etihad Water & Electricity Company will supply power to the Ajman data centre.

    Jasmin says the company exceeded its capacity target of 300MW by the end of 2023, up from 126MW in early 2022.

    The firm has grown significantly since 2020, when it had a capacity of just 40MW, following the 2021 merger of the data centre divisions of Khazna’s parent firm G42 and telecommunications firm e&, previously known as Etisalat.

    The company is also expanding its presence in other markets, including Saudi Arabia, Egypt and Kenya.

    "By the end of this year and the start of Q1 next year, we will be in many [more] geographies," says Jasmin.

    Asked about the top driver for the company's future expansion, the executive says: "AI, AI and more AI."

    He adds: "This is based on what the [UAE] leadership wants, which is to have the UAE at the forefront of the AI revolution and with G42, we sit at the core of the infrastructure that is needed for AI.

    "For many years, we were always looking to the West to see what we can do, but now we want to take the lead in building the infrastructure that is powering AI here in the UAE as well as globally," says Jasmin.

    As things stand, the government's AI push has increased interest in building data centre capacity, if not changed the landscape entirely for Khazna.

    In June 2022, the firm's CEO Hassan Al-Naqbi told MEED that increased digitalisation by government entities and enterprises, as well as the adoption of school- and work-from-home practices, mean that the Middle East region will continue to drive double-digit growth in demand for data centre services.

    In addition, the general mandate for regional governments to retain data within their national jurisdictions is also a major driver for the growth of data centre services in the region, which was nearly double the global average at the time.

    Green data centre

    Known for being a major energy consumer, there is a growing awareness of how data centres can be made more sustainable or greener, particularly due to the cooling requirements, which are especially crucial in the Gulf region.

    Jasmin says in some countries, such as Kenya, a 100% renewable energy powered data centre is now feasible.

    Khazna's facility in Kenya is powered by 100% renewable geothermal energy and can go from a scale of 100MW up to 1GW, because "we are located in a green energy park that is fed by renewable energy currently at 900MW, but with the potential to grow to up to 10GW".

    Related reads:

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12767183/main.gif
    Jennifer Aguinaldo
  • Dubai Municipality seeks Tasreef partner

    18 October 2024

    Register for MEED's 14-day trial access 

    Dubai Municipality has issued a tender notice for a delivery partner to develop and implement a model tailored to the needs of the Tasreef programme, Dubai's planned AED30bn ($8.16bn) rainwater drainage network project.

    MEED understands that the request for proposals targets technical and engineering advisory companies.

    Dubai Municipality expects to receive bids by 7 November, Fahad Al-Awadhi, director of drainage system and recycled water projects department, Dubai Municipality, said in a recent social media post.

    According to Al-Awadhi, the Tasreef programme consists of three streamlines to enhance the effectiveness of Dubai's stormwater system:

    • Improvement of infiltration and sustainable drainage systems and artificial intelligence (AI) applications
    • Upgrade of stormwater systems in Deira, Bur Dubai and Jebel Ali
    • Proposed stormwater tunnels in Deira and Bur Dubai, as well as link tunnels in Jebel Ali

    In addition, the Tasreef programme will address storm event management, including raising awareness about storm impacts, implementing proactive risk control measures, developing marketing and procurement strategies and establishing communication plans. 

    Al-Awadhi added: "The proposed stormwater tunnels, links and terminal pump stations aim to enhance the stormwater network’s capacity by 700% to handle up to 65 millimetres of rainfall per day. This programme represents the largest rainwater collection project in a single system within the region."

    An early study is under way for Tasreef, which Sheikh Mohammed Bin Rashid Al-Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, approved in June.

    A source familiar with the project said that Dubai Municipality is inclined to consider a public-private partnership (PPP) procurement model for the project.

    Sheikh Mohammed's approval of Tasreef came two months after a storm in April inundated Dubai, causing widespread flooding and damage to infrastructure and property in certain areas.

    The project will raise the emirate-wide drainage network’s capacity to more than 20 million cubic metres of water a day. It is hoped that it will meet Dubai's needs for the next 100 years.

    The project is a continuation of drainage projects launched by Dubai in 2019, covering the Expo Dubai area, Al-Maktoum International Airport City and Jebel Ali.

    The rainwater drainage capacity through tunnels will reach 20 million cubic metres a day, with a flow capacity of 230 cubic metres a second.

    According to data from regional projects tracker MEED Projects, the Dubai Municipality Deep Tunnel Storm Water System (DTSWS) was first announced in 2014.

    It has several components, and the first two packages covering Jebel Ali were awarded in 2017 and 2018 and completed in 2022.

    The remaining packages of the master plan were on hold before the government's announcement on 24 June.

    The DTSWS project is separate from the Dubai Strategic Sewage Tunnels project, which is being developed under a PPP contracting model.  

    https://image.digitalinsightresearch.in/uploads/NewsArticle/12753886/main.jpg
    Jennifer Aguinaldo