INVESTMENT OPPORTUNITIES IN THE DESALINATION SECTOR IN THE KINGDOM OF

SAUDI ARABIA

Wednesday, February 1st , 2012

By

Dr. Abdulrahman Al-Ibrahim

Governor Saline Water Conversion Corporation

IN THE NAME OF ALLAH, THE MOST BENEFICENT, THE MERCIFUL,

Introduction

Decommissioning of existing desalination plants in near future and large investments for new desalination projects

Main Challenges Facing Water and

Desalination Sector in the Kingdom of Saudi

Arabia

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Rapid increase in population, increase in water demand, industrialization and high per-capita consumption

Limited natural water sources

Widening gap between water demand and supply

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• Desalinated water is an important contributor to alleviate water shortage

• Desalination is a strategic industry for the kingdom of Saudi Arabia

To Overcome the Shortage of Water

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Late King Abdulaziz ordered (2) distillation units with a capacity of (300) Cubic Meters/day equivalent to (80,000) gallons for Jeddah to serve the Pilgrims and Jeddah population. (Al-Kandasah)

The first water resources survey for the Kingdom was conducted.

Established a Department for Desalination within the Ministry of Agriculture and Water.

The Desalination Department became a Deputy Ministry in the Ministry of Agriculture and Water .

A Royal Decree established the present Saline Water Conversion Corporation (SWCC) as an independent organization with the Minister of Agriculture and Water as the Chairman of the Board.

King Abdullah bin Abdulaziz Al-Saud, the Custodian of the Two Holy Mosques and the head of the Supreme Economic Council approved the executive program for the privatization of SWCC (decision no. 2/29) of 29/06/1429H – 3/07/2008G

2008 1928 1942 1965 1972 1974

Saudi Arabia Water and Desalination

History In a Glance

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Growth of installed

desalination capacity

world wide

Source: GWI DesalData / IDA

Mill

ion

m3

/d

* 2011 figures include plants currently under construction that are expected to come online in 2011.

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Top 10 Countries in

Water Desalination

Million m3/d

Saudi Arabia

United Arab Emirates

Spain

United State Of America

China

Algeria

Australia

India

Israel

Qatar

Source: GWI DesalData / IDA

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KSA Desalination Share in GCC

(2010)

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SWCC Contribution to Water Sector in the

Kingdom

Past & Present

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Saline Water Conversion

Corporation (SWCC)

27 Plants at 17 locations ( 12 dual purpose plants, 15 single purpose)

Water: Around 3.3M m3/day cover 50% of drinking water needs in the Kingdom

5114 MW of electricity representing 17 % of total power generation capacity in the Kingdom

More than 4,500 Km of pipelines

14 main water transmission systems

34 pumping stations

184 storage tanks (capacity: 9 million m3)

19 blending stations

2 plants under construction , 1 plant under tender

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Existing Plants

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Jubail plant

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SWCC plants

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Pipelines

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Pipelines

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Location of Main Generation and

Transmission Assets

Albirk

Shuqaiq

Farasan

Shu-AibaJeddah

Azizia

Rabigh

Yanbu

Omluj

Alwajih

QunfuthaAllaith

Riyadh

Kafji

Jobail

Khobar

Abha

Hafoof

K. Moshait

Makkah Almoukarramah

Taif

AlmadinaAlmounawara

Buraidah

Duba

Haqil

Large Plant

Satellite Plant

City Benefiting

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Vision &

Mission

SWCC Vision Pioneering The Seawater Desalination Production

and Transmission

SWCC Mission To Meet The Kingdom’s Desalination Water Demand

and Contribute To Economic and Social Growth through Effective Investment In Human and Physical

Asset Resources

SWCC established a Training Center (TC) in 1982 at Al-Jubail to develop and improve the skills of its workforce.

Training Center has unique facilities to train and upgrade SWCC personnel in various technical fields such as:

Operation, Instrumentation, Electrical, mechanical maintenance, Computer application etc.

More than 8500 SWCC employees have been trained in administrative, technical, engineering and computer applications.

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Training

Recently R&D Center was renamed to Saline Water Desalination Research Institute (SWDRI) to widen its scope for technology development.

It has 6 departments: SCIENTIFIC DEPARTMENTS

• Chemistry • Corrosion • Environment, Ecology & Marine Biology

ENGINEERING DEPARTMENTS • Reverse Osmosis • Thermal • Pilot Plants

SWCC established a Research and Development Center (RDC) in 1987 at Al-Jubail.

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Researches

Wate

r C

ap

acit

ies in

(‘0

00 m

3/d

ay) Shortage

Planned IWPP and Private Desalination Export Capacity

Ground and Surface Water Supply

Proposed Additional Desalination Capacity

Total Demand

SWCC Existing & Planned Export

Capacity

Contingency

Today, SWCC accounts for ~20%

of world and around half of the region’s

desalination capacity

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KSA Total Water Demand Versus Planned Supply

Sources

(in ‘000 m3/day, 2005–2025)

Population

(Million)

Water demand

(Million m3/day)

Desalination share in water

2025

34(*)

8.5(*)

63%

(5.2 Million

m3/day)

2010

27.2

6.8

53%

(3.3 Million

m3/day)

(*): assuming an average annual growth rate of 1.5 %

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Water Demand in KSA – Main

Figures

Plant Water Capacity

(m3/day) Power Capacity

(Megawatts) Expected Date

Jeddah - RO 240,000 - 2012

Ras Al-Khair 1,025,000 2,400 2013 / 2014

Pipeline Capacity (m3/day)

Length (Kilometers)

Expected Date

Ras Al-Khair / Riyadh

1,000,000 900 2013

Ras Al-Khair / Hafr El Batn

160,000 350 2013

Al-Laith 9,000 6 2103

Makkah / Taif / Jeddah

790,000 344 2013 / 2014

Shuqaiq (Phase 2)

565,000 913 2014

Farasan 9,000 2 2014

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SWCC is currently constructing major

plants and pipelines – Ras Al-khair is the

largest cogeneration project of its kind in the

world

Plants Capacity (m3/day)

Power Capacity (Megawatts)

Expected Date

Rabigh 3 9,000 - 2013

Haql 3 9,000 - 2013

Dhuba 4 9,000 - 2013

Yanbu 3 550,000 2,500 2014

Pipeline Capacity (m3/day)

Length (Kilometers)

Expected Date

Yanbu - Madina (Ph 3)

560,000 597 2015

Rabigh - Khulais 5,000 19 2015

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SWCC is also tendering several

projects including a large cogeneration

plant and transmission system in Yanbu

Plant Water

(m3/day) Power

(Megawatts) Expected Date

Shuqaiq 3 175,000 175 2015

Khobar 4 250,000 250 2017

Jubail 4 320,000 320 2017

Shoaiba 4 650,000 665 2019

Yanbu 4 300,000 307 2021

Yanbu 5 100,000 102 2023

Khobar 5 220,000 220 2024

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SWCC’s expected future capacities

includes commissioning of seven large plants

by 2024

Total = US$ 17.5Billion (SR 65 Billion)

CAPEX

17,453

5,802

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Total Capital and Operational

Investments until

2020

Power and Water

Transmission

11,651

– Construction of desalination plants in Saudi Arabia:

(Sasakura, Mitsubishi, Hitachi zosen, Mitsui, Ishikawajima-Harima Heavy industry).

– Evaluation of Japanese manufactured Membranes in a number of SWCC plants.

– Supply of RO Membranes (Toyobo, Toray and Nitto Denko).

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Past Cooperation with

Private Sector in JAPAN

JICA for a joint research program with SWDRI started in 1990 and completed at 1995 in the following fields:

Developments in the performance of heat exchanger

Scale removal and evaluation of new antiscalent materials

New methods to prevent seawater pollution and its impact on the quality of water

Evaluation of membranes and the effect of pollution on its performance

Training of Saudi researchers in Japan 27

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Past Cooperation with

Government Sector in JAPAN

Between Water Reuse Promotion Center (WRPC) & Sasakura company and SWDRI in research project to couple NF with MED at unprecedented top brine temperature of 125˚C

With Hitachi Zosen to develop and optimize solar assisted thermal desalination plants

With Metawater to evaluate ceramic membrane as pretreatment for RO

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Current Cooperation with Government and Private Sector in

JAPAN

Construction Opportunities including EPC for New Desalination Plants such as Haql 3, Dhuba 4, Rabigh 3 and Yanbu 3 in addition to rehabilitation of SWCC old plants .

Procurement of Desalination Equipment, Membranes, chemicals, materials, etc.

Capacity Building by training of Saudi engineers in specialized centers and workshops in Japan.

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Investment Opportunities in

Desalination sector

• Through a joint research programs with SWDRI in different areas of research.

• Transfer of know-how such as the current cooperation with Singapore, Korea, etc.

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Investment Opportunities in

Desalination sector

– Spare Parts Manufacturing in Saudi Arabia

– Coupling of renewable energy ( Solar, Wind and Nuclear energy ) with desalination technologies ( membrane and thermal)

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Investment Opportunities in

Desalination sector

• Desalination is a strategic choice in Saudi Arabia to overcome water shortage.

Desalination Sector is growing, benefiting from the full support of the government.

SWCC is committed to national and global collaboration as well as private sector participation in the desalination sector .

Local and international private sector participation in the desalination sector benefits a broad range of players: investors, financing institutions, operators, EPC contractors, equipment and materials providers etc.

• SWDRI encourages all sorts of cooperation for the development of desalination industry.

• The most important priority is to develop innovative desalination technologies and processes which are cost effective.

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Summery

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Thank you