With financial closing of the Shuaibah Phase III integrated power and water project, Saudi Arabia has set a number of records for IWPP development. And when complete in 2009, the plant will be the largest greenfield IWPP in the world.
Saudi Arabia has one of the fastest growing populations in the world – a key driver behind the Kingdom’s growing demand for new power generating capacity and water. Power generation is projected to rise from around 35 GW to 102 GW in 2030. Just over half of this new capacity is expected to be in the form of integrated power and desalination projects.
Figure 1. Artist’s impression of the Shuaibah phase 3 IWPP
One of the most important projects currently underway is the Shuaibah III power plant and desalination project; the first IWPP in the Kingdom. When built, it will be the largest greenfield independent power and water project (IWPP) and will provide a sustainable, efficient and environmentally friendly supply of electricity and water to the Kingdom.
Project origins & financing
The international competitive bidding process for the 900 MW net oil-fired steam power plant and an associated 880 000 m3 desalination plant was launched in July 2004 by WEC (Saudi Water & Electricity Company). In June 2005, a Saudi-Malaysian consortium comprised of ACWA Power Projects of Saudi Arabia and Tenaga Nasional Berhad, Malakoff Berhad and Khazanah Berhad of Malaysia was selected as the first ranked bidder to Build, Own and Operate (BOT) the Shuaibah IWPP. In August, the cabinet approved the formation of the Shuaibah Water & Electricity Company (SWEC); the project company. SWEC awarded the consortium of Siemens Power Generation and Doosan Heavy Industries and Construction Co the contract for the turnkey Engineering, Procurement and Construction (EPC) of this steam power plant with associated desalination facility to be located in Shuaibah. Siemens is the lead member of this consortium. On November 15th, the Power and Water Purchase Agreement was signed in Riyadh.
Financial closing of the project was achieved in January this year. The total project costs of $2.5 billion is funded by a multi-tranche financing on a debt equity ratio of 80:20 comprising commercial facilities of $875 million, Islamic financing of $210 million and $455 million from Export-Import Bank of Korea (“K-Exim”) and export credit financing of $400 million from Hermes and balance from funds internally generated from the project and equity bridge loan of approximately $500 million. In addition, the financing also comprises $72 million of standby commercial debt and $18 million of standby equity bridge loan to cover any cost overruns.
The successful closing of Shuaibah III was a significant milestone in the Kingdom’s privatization programme and should give developers and their lenders considerable confidence for future IWPPs. The 20-year loan tenors (a Saudi record and a joint GCC record) and six-year equity bridge tenors (a first for Saudi Arabia and a GCC record) compare favourably with neighbouring GCC countries and indicate that the Kingdom, despite being in the early stages of its IWPP programme, is now being regarded as a relatively mature and sophisticated market.
Shuaibah Phase III is the biggest IWPP worldwide and the largest single order that Siemens has posted to date for the Gulf region. The order volume amounts to around $1.8 billion.
The main deciding factor in the Siemens-led consortium being awarded this contract is the turnkey competence of Siemens PG. To date, the company has built some 300 power plants under turnkey contracts around the world. On the basis of overall technical and commercial evaluation for executing the EPC, the Siemens-led consortium including Doosan was selected to build the plant. Following on from the projects Jedda III, Ghazlan, and Al Khobar, Shuaibah is the fourth high-capacity steam power plant that Siemens PG is erecting in Saudi Arabia.
The Shuaibah plant will be located about 90 km South of Jeddah. Its south site boundary is adjacent to the existing plants Shuaiba I and II. The Siemens scope of supply comprises three steam turbine-generator units, each rated at 400 MW, along with the associated electrical and instrumentation & control systems. Siemens will lead the consortium. Doosan Heavy Industries & Construction Co. Ltd. will be responsible for the desalination facility. It will also be the largest desalination plant in the world to date.
Figure 2. Soil improvement was carried out near the unit buildings
After the customer handed over the construction site to the consortium, implementation of soil improvement measures commenced in March 2006. Soil improvement was achieved in the region of the unit buildings by installing stone columns. This technique increases the load-bearing capacity of the sandy soil by installing crushed rock on a stable subsoil (reef limestone) and then compacting the rock. The plan calls for 40 000 individual stone columns, totaling 250 000 m in length. In the case of the desalination plants, which exert a lower load per unit area, dynamic improvement of the construction site soil is achieved with drop weights.
This power plant comprises three 400 MW units (gross power output, 60 Hz) and has a daily drinking water production of 880 000 m3 (191 million gallons). Each 400 MW unit comprises a high pressure turbine (150 bar, 510°C), a two-flow intermediate pressure turbine (40 bar, 460°C), and a 497 MVA hydrogen-cooled generator with static excitation. Power is fed into the 380 kV grid via gas insulated switchgear.
The main buildings have a footprint of 900 x 800 m. For the power island structures, Siemens will place approximately 100 000 m3 of reinforced concrete and will use about 6 000 t of steel in less than two years.
The power plant will burn crude oil, which is to be supplied via a pumping station (on the existing jetty of Shuaiba I/II) that feeds the three 110 000 m3 oil tanks, sufficient for 30 days of operation at full load.
The three steam generators of the power unit to be installed are two-pass type, natural circulation, drum type boilers, which will be designed and manufactured by Ansaldo Caldaie. The design conditions of the boilers are 158 bar/514°C/461°C at 560.5 kg/s. The steam generator will be capable of firing crude oil at BMCR (Boiler Maximum Continuous Rating) while the ignition fuel will be light fuel oil.
The boiler units comprise a water-cooled combustion chamber, one large capacity steam drum, two superheater sections, one reheater section and an economiser section. The air-flue-gas way is of a two train design equipped with rotary regenerative air heaters, forced daft fans, FGD booster fans and electrostatic precipitators including an ash handling system.
The firing system comprises 24 low-NOx fuel oil burners and all the necessary associated equipment. Sulphur will be removed from the flue gases in a flue gas desulphurization plant (FGD) using seawater scrubber system technology. Each FGD will be supplied with 24 m3 of seawater per second via a separate duct with a 4×4 m cross section. This is comparable to the water that flows through a medium-sized river in Europe. With crude oil with a sulphur content of 1.8 per cent, 95 per cent of SO2 will be removed from the flue gas, equivalent to emissions of 150 mg/m3stp.
The use of light crude oil provides a 50 per cent reduction in sulphur compared to standard fuels and this combined with the FGD yields a reduction in SO2 emissions of more than 97 per cent. The NOx and SOx emissions will be below the requirements specified by the World Bank.
Figure 3. The Al Taweelah IWPP project was carried out by Siemens in the UAE
After a construction period of 37 months, in February 2009 the first unit will be handed over to the customer. The other two units will follow every second month. By the last quarter of 2009, the plant will start generating power, increasing the availability of power in the western region of Saudi Arabia. When complete, the three units will provide about 900 MW net of power to the national grid, plus some 300 MW to supply plant auxiliary power requirements in the desalination unit. The Multi Stage Flashing (MSF) desalination plant supplied by Doosan will provide about 880 000 m3 per day of fresh water for the cities of Makkah, Jeddah, Taif und Al-Baha.
The world’s largest greenfield IWPP, is a very special one. It might become a model to further projects not only in Saudi Arabia but also for other countries in the Middle East region.