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News/GCC Roundup

GCC grid contracts signed

The GCC Interconnection Authority has awarded all 14 contracts for the first phase of the GCC grid interconnection project.

Six of the contracts, worth $470 million, went to ABB. The company will build six substations at Al Zour in Kuwait, Al Jasr in Bahrain, Al Fadhili and Ghunan in Saudi Arabia, Salwa on the Qatari/Sauidi border and Doha South in Qatar.

The Italian/French group of Perelli and Nexans was awarded a $400 million contract for the installation of a 40 km long, 400 kV, submarine cable between Ras al Qurrayah (Saudi Arabia) and Al Jasr (Bahrain).

Areva T&D of France won two contracts worth $233.5 million to build what will be the Middle East’s first HVDC converter station as well as the entire GCC grid automation system.

Saudi Arabia’s national Contracting Company and Middle East Engineering & Development Company (Meedco), the Saudi affiliate of Hyundai Engineering and Construction Company, each won two of the four lots on the overhead line package. These contracts were worth $250 million. Canadian company SNC Lavalin won the contract for the supervision work.

The first phase of the GCC project, to be commissioned in 2008, will interconnect the power transmission grids of Saudi Arabia and Bahrain. When all three phases are complete, it will interconnect the grid of Saudi Arabia, Bahrain, Qatar, United Arab Emirates, Kuwait and Oman.


Population explosion combined with the rapidly increasing requirement from manufacturing and petrochemicals industries is expected to outstrip the production from existing power stations. Current capacity in GCC countries is an estimated 45 000 MW. To meet an expected demand of an additional 20 000 MW in GCC countries by 2010, governments are calling on the private sector and possibly foreign investors to pour new funds into the industry.

Part of the problem encountered in the region arises from the inadequacies in distribution and efficient use of the installed capacity to meet the peaks in demand. To increase the reliability of electricity generation in emergency situations, the six countries that make up the Gulf Cooperation Council (GCC) have launched the GCC power grid project that will link the electricity network of the six nations. In September 2005, the Saudi based GCC power grid authority awarded the $13 billion phase 1 project that will link Kuwait, Saudi Arabia, Qatar and Bahrain.

Saudi Arabia

Saudi Arabia is by far the largest investor in the power sector. It will invest nearly $15.5 billion in more than 20 new upcoming generation and transmission projects in the next ten years and has recently invested almost $16 billion in more than 30 ongoing projects. The largest project under bidding is the independent water and power producer (IWPP) project in Jubail for Marafiq which will add another 2400 MW of electricity to the existing plant. The client, Marafiq, is still evaluating proposals submitted by three consortia earlier this year and an award is expected in the coming months. Saudi Electricity Company awarded the US$1650 million IWPP Shoaiba phase 3 in late October 2005 to a consortium led by ACWA.

A number of other IWPP projects are still under study including the 3600 MW expansion to Qurayyah II, the 2400 MW expansion to Rabigh II, the Yanbu II 2400 MW project and the Ras Al Zour 2500 MW. Moreover the Saudi Electricity Company is considering the development of additional capacity with the expansion of its PP9, PP10, Sulbukh and Muzahimiyah plants.


In the United Arab Emirates, Dubai Electricity and Water Authority (Dewa) is already looking at expanding its main facility with the Jebel Ali M Station phase 1. Fichtner has been awarded the consultancy contract by Dewa and is expected to tender this project in June next year. The UAE power generation capacity is reaching 16 200 MW. Nearly 25 ongoing power generation and transmission developments will increase capacity by 10 000 MW by 2010. The UAE is currently investing $7 billion in power generation and distribution with an additional $7.5 billion planned in the next five years.


As for the rest of the Gulf region, Kuwait is now investing $3700 million in ten ongoing power developments. The Ministry of Energy has invited contractors to submit their bids for the new gas fired power plant at Subiya whilst the bidding process on the Al Zour North power plant has been delayed due to concern of gas supply shortage. A new tender issue is expected during the first quarter of 2006.


With very large investment in the GTL and LNG industries, Qatar electricity demand is growing at a very fast pace. Qatar General Electricity & Water Corporation (Kahrama) will invest over $6000 million in ten major power developments by 2010. Whilst the Ras Abu Fontas B2 plant was awarded in October 2005 to General Electric to install an additional 500 MW of generation capacity, Kahrama together with the consultant Fichtner is preparing to tender the 1200 MW IWPP that will accompany the development of the Petrochemical and Refinery complex at Mesaieed.


Finally, Sohar Aluminium in Oman is evaluating bids for the 800 MW power plant for the new aluminium smelter. The Ministry of National Economy is expected to issue a Request For Proposal in early November 2005 for the construction of its IWPP Barka Phase 2 project.

Further information

This was compiled by market intelligence company, Sentinel. For further information visit: https://sentinel-me.com

Tenders, Bids & Contracts

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