Global Arab Network | Powering up – Bahrain catering demand for energy

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Powering up – Bahrain catering demand for energy

Wednesday, 19 October 2011 00:20

http://www.english.globalarabnetwork.com/images/stories/2010/MAY/bahrain-.jpg

Global Arab Network - Bahrain is making progress on building infrastructure to power its growing energy demand, with the Al Dur Power and Water Desalination Plant set to be up and running by November, Global Arab Network reports according to OBG.

When the $2.1bn reverse osmosis (RO) technology plant becomes operational, Bahrain will be able to produce nearly double the power needed to meet its energy demand, said the minister of energy, Abdul Hussain bin Ali Mirza, at the September 14 opening of the plant’s gas delivery system, provided by the Bahrain Petroleum Company (BAPCO).

“Bahrain’s largest peak per day demand of power has been 2812 MW so far, while this plant alone will be producing 1234 MW [per day],” Mirza said. “With its commissioning, power output in Bahrain will increase to 4000 MW, which means there will be plenty of surplus electricity available if the need arises.”

The need may very well arise, according to Abdulmajeed Ali Alawadhi, the chief executive of the Electricity & Water Authority (EWA). “During 2010 and 2011 electricity demand has been increasing by 8% per year, and we forecast growth to increase up to 10% over the coming years,” he told OBG.

The Al Dur plant, a major independent power and water project (IPWP), is located in southern Bahrain, about 40 km from Al Ezzel, the Kingdom’s first independent power plant project. Al Dur is a greenfield, natural gas-fired installation that, in addition to generating electricity, will have the capacity to deliver 48m gallons of desalinated seawater a day. Degrémont, a subsidiary of the water treatment and desalination company Suez Environment, provided the RO technology for the plant.

In 2008, France’s GDF Suez Energy International was awarded the contract to build, own and operate the Al Dur plant. GDF Suez and the Gulf Investment Corporation, a Kuwaiti-based investment company owned by GCC countries, then formed a 50:50 partnership consortium for the project.

GDF Suez has played a crucial role in the Kingdom’s development process. The company has a 45% stake in the Al Ezzel plant and is also a shareholder in the Al Hidd power and water plant, which delivers 938 MW of electricity and 136,000 sq metres of water per day.

More investment arrived in July 2009, when Islamic investment bank Capital Management House (CMH) formed a consortium of financial institutions to acquire an equity stake in the Al Dur project, sourcing Islamic financiers to participate in the project’s backing. The Electricity and Water Authority of Bahrain is the sole off-taker of the Al Dur plant output, as stipulated in the 20-year power and water purchase agreement.

For its part, BAPCO’s gas pipeline to the Al Dur plant is considered to be one of many steps towards a wide-ranging privatisation strategy in Bahrain that encourages the private sector to launch projects and services, thereby enhancing its role in the development process and emphasising the supervisory and regulatory role of the government.

“Once the Al Dur plant is completed, there will be no more need to take electricity from the GCC grid for the next four years, only during emergency cases,” Alawadhi told OBG. “For 2012 there are no further projects planned for the generation of power or water, but there is still a lot to be built on the transmission side such as storage tanks, pipelines and pumping stations. In that respect, four contracts have just been signed with three companies, totalling BD500m ($132.6m).”

The Kingdom has certainly embraced privatisation in recent years, having sold several power plants to private consortiums. In addition to the Al Dur plant, the government sold its largest electrical plant, the Al Hidd Power Station, to a consortium in 2006 for $728m. In 2009, the Higher Commission of Electricity awarded General Electric a $240m contract to purchase new gas turbines as part of a plan to expand the existing Al Dur Power Plant.

These sales are all part of the government’s strategy to jumpstart growth. Mirza said the $330m, 13.65-km pipeline, which has a capacity of 1bn standard cu ft a day, will help fuel industrial growth in the Kingdom.

“This is no doubt a significant achievement for BAPCO, but also for Bahrain because this delivery system will take care of all of the power plant needs, as well as future expansion of industry in the area,” Mirza said. “Bahrain is poised for major industrial development, and this is a major milestone in that direction.”

At the same September 14 event, BAPCO’s chief executive, Faisal Al Mahroos, said the pipeline was one of the largest and most important industrial projects being implemented in Bahrain. “This is also in line with BAPCO’s strategies to enhance the oil and gas sector and cater for the growing demand for energy in the future,” he said. (OBG)

Global Arab Network

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