Water Resources Equipment in Saudi Arabia

A Hot Tip about Environmental Technologies in Saudi Arabia

Posted on: 24 May 2010


Saudi Arabia lies in an arid area of the world with severe climate conditions, and an absence of permanent natural surface water resources such as rivers and lakes. In addition, Saudi Arabia’s high population growth, rapid urbanization, industrialization and agricultural development make water one of the most precious resources in the Kingdom. In order to meet expected demand growth for water, the Kingdom will have to invest $5 billion a year in infrastructure development over the next 20 years.


Saudi Arabia has established 30 desalination plants on the Red Sea and Arabian Gulf coasts at a total cost of $20.2 billion. The country is rapidly depleting its 2.2 billion cubic meters of proven groundwater. 23% of water comes from aquifers, 70% from desalination and 7% from wastewater reclamation. 80% of water has been used in questionable agriculture projects, such as the world’s most heavily subsidized wheat production. 30% of household water comes from desalinating. Saudi Arabia is the biggest user of desalinated water in the world (36% of world’s total), and demand is growing by at least 3.4% year. While the cost of desalination is falling, it still costs $1.33 to process, deliver and remove the waste from one cubic meter of such water, while a Saudi consumer pays only 4 cents. The Ministry of Water and Electricity (MOWE) announces study after study to rationalize water tariffs and privatize the state owned Saline Water Conversation Corporation (SWCC).


With its budget surplus, the Saudi Government is working on a number of large projects, primarily in the water and sewage system, in an attempt to meet the needs posed by population growth and industrial growth. Major infrastructure projects include the construction of a 28 new water distribution network, 21 new the desalination plants, the refurbishment of the Jeddah desalination Plant-5, the expansion of Asir II desalination plant, Yanbu/Medina III desalination plants, and the expansion of wastewater treatment plants in Jeddah, Riyadh, and Dammam.


In 2003, the Saudi Government brought the Kingdom’s water and power sectors under a single authority, the Ministry of Water and Electricity (MOWE). The governing body sets forth general policies and strategies that aim to expand and improve Saudi Arabia’s basic utilities. More specifically, the Ministry has issued guidelines for the operation of Saudi Arabia’s Independent Water and Power Projects (IWPPs).


Further, MOWE has established a regulatory authority to help implement its policies, as well as corporations to develop new power and water projects. Also in 2001, the Royal Commission for Jubail and Yanbu founded the Power & Water Utility Company for Jubail and Yanbu, known as Marafiq. This company is responsible for planning and developing power and water utilities in Jubail and Yanbu industrial cities.


Another major development took place in May 2003 with the establishment of a new company, Water & Electricity Company (WEC), between the Saline Water Conversion Corp. (SWCC) and Saudi Electricity Co. (SEC) to carry out the independent Water and Power Project (IWPP) in partnership with the developer. There are three IWPP projects under bidding: at Shuqaiq (Phase 2), Ras Al-Zour, and Jubail (Phase 3). The three projects will have desalination water capacity of 1870 million cubic meters of desalinated water per day.


In 2006, the new National Water Company (NWC) was founded. It will facilitate privatization process and oversee the regional operations under PPP contracts. In the long term, NWC will oversee most water and wastewater operations in the Kingdom. The National Water Company will include regional business units and a core to manage and provide strategic guidance.


National Water Company (NWC)

National Water Company (NWC), a Saudi joint stock company fully owned by the government (namely the Public Investment Fund (PIF)), was established in 2006 to provide water and wastewater services in accordance with the latest international standards by the concerted efforts of national cadres working together with certain international operators through foreign PPP. NWC focuses on providing drinking water of high quality for all customers, providing all households with water and wastewater connections, the preservation of natural water resources, the protection of the environment, making maximum use of the Treated Sewage Effluent (TSE), and the development and training of qualified Saudi employees in accordance with the latest international standards.


Saline Water Conversion Corporation (SWCC)

Established in 1965, the Saline Water Conversion Corporation (SWCC) is the entity responsible for operating the country’s 30 desalination plants and providing fresh water for the entire country. It is also the country’s second largest supplier of power with 12 plants generating 3,426 MW. In 2007, the SWCC spent $1.04 billion (SR3.9 billion) to develop its activities, a 24% increase from 2006. In recent years, the SWCC has embarked upon a privatization plan, which established the National Water Company (NWC).


The state-owned desalination plant operator will be a holding company with separate production and transmission subsidiaries. As of November 2008, the SWCC had completed five of seven stages that will result in the company’s privatization. The SWCC is currently awaiting approval of the final two stages by the Supreme Economic Council. Based on the IWPP model, the private sector will be able to participate and contracts may begin in August 2009. With the privatization of the SWCC and the creation of the National Water Company, the water sector is expected to be under full private control by the end of the decade.


Independent Water Projects (IPPs)

Private sector investment is emerging as a key component in the upgrading and expansion of Saudi Arabia’s water infrastructure. The IPP concept is also gaining ground among Saudi Arabia’s leading organizations, including the Ministry of Commerce & Industry, Ministry of Water & Electricity, PCA, and Saudi Aramco, which are contracting local and international private companies to build desalination plants for their mega projects.


Saudi Aramco IWP

In June 2003, a consortium, led by the U.S. company Aquatech and including the local Rabigh Desalination Co., was awarded a $20 million contract to build a desalination plant for Saudi Aramco’s Rabigh refinery complex. The project, which stipulates a 20-year water conversion agreement, is expected to come on stream by 2006.


In August 2005, a consortium led by Marubeni and Itochu, and including the local ACWA Power Projects, was awarded a $1.1 billion contract to build a co-generation and desalination plant for the Rabigh integrated petrochemical and refining complex jointly owned by Saudi Aramco and Sumitomo Chemical. An engineering, procurement, and construction (EPC) contract for the co-generation and desalination plant was also awarded to Mitsubishi Heavy Industries Ltd. on a turn-key basis. The project, which stipulates a 25-year water and energy conversion agreement, is expected to come on stream by 2008.


Water & Electricity Company (WEC)

In October 2005, the Shuaiba IWPP was awarded to a Saudi Malaysian consortium: The $2.4 billion project involves a 20-year power and water purchase agreement to produce 900 MW of electricity and 880 cubic meters of desalinated water per day. The Shuaiba IWPP comes on stream by the third quarter of 2009.


Power & Water Utility Co. for Jubail & Yanbu (Marafiq)

On January 1, 2003, the Power and Water Utility Company for Jubail and Yanbu (MARAFIQ) was established to undertake the operation, management, expansion and construction of seawater cooling systems, water desalination plants, sanitary and industrial wastewater systems and electric power systems, thus providing essential utility services to industrial, commercial and residential customers in the industrial cities of Jubail and Yanbu. In December 2006, Marafiq Jubail was awarded to French-Belgian Utility consortium. The $3.3 billion project involves a 20-year power and water purchase agreement to produce 2,800 MW, and 800,000 cubic meters of desalinated water per day. The project would is to start production in the second half of 2009.


Best Prospects/Services

The Saline Water Conversion Corp. (SWCC) continues to study the introduction of 20 new saline water conversation projects to be implemented in the near future to meet the demand increase for drinking and civil used water. The 20 new projects will include constructing new plants and expanding existing ones. SWAC would like to see more American companies involved in those projects due to their high tech and good reputation in this market. Also, there are several large opportunities in the wastewater treatment sector. Several major projects are under tendering, such as North Jeddah wastewater treatment, Lake Musk Sewerage Treatment Project, Hair wastewater treatment in Riyadh, Medina wastewater treatment, and Dammam wastewater treatment.


The following are a list of services and products will be required for future desalination, and wastewater projects to be undertaken in Saudi Arabia:

• Consulting and engineering services

• Anti-scaling chemicals

• Operations and maintenance services

• RO membranes

• Filters

• Steam & gas turbines

• Boilers

• Wastewater treatment equipment

• Treatment chemicals

• Pumps

• Screening equipment

• Training services



The government now has more resources to embark on long-planned improvements and a long awaited expansion of water infrastructure, transport and wastewater treatment plants. Over the next five years 2010-2015, Saudi Arabia will require 8,500 km of new pipeline for freshwater transport and over 32,000 km for wastewater disposal pipes. Also, major business opportunities will be forthcoming as the sector opens up for privatization. Industry sources expect that the Government will build more new desalination plants, water pipelines, and wastewater treatment plants on a BOO/BOT basis with the Water & Electricity Company (WEC), and National Water Company (NWC) taking the leads. Initially, WEC plans to set up the second group of three IWPP projects with an investment potential of $8 billion. These IWPP projects will provide desalinated water and power to their respective regions.



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Posted: 24 May 2010

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