Growth drives shift in Gulf desalination technology

16 May 2008
Gulf states are turning to reverse osmosis desalination as demand for water rises and energy costs increase.

Governments in the region are facing a growing challenge to provide adequate water supplies, as rapid population growth puts increasing pressure on the region’s limited resources, while the cost of building desalination plants continues to rise.

Saudi Arabia’s population, for example, has more than doubled over the past 20 years to 27.6 million in July 2007, and is expected to double again by 2020. Oman’s population, meanwhile, has quadrupled over the past five decades.

This population increase coupled with strong economic expansion in the region and a rapid rise in tourism - Dubai welcomed 1.6 million tourists in 1995 and 6.1 million in 2005 - has placed even greater pressure on water resources.

According to figures from research service MEED Insight, the GCC’s installed desalination capacity will have to almost double to an estimated 5 billion gallons a day (g/d) up to 2015 to meet average demand growth of 8 per cent a year. At today’s prices, this would require an investment of $20.2bn.

Rising inflation

This huge capital investment comes at the same time as construction and production costs have soared. In 2003, the unit costs on phase 1 of the Jebel Ali L desalination station were estimated at $4.10 a gallon for production from multi-stage flash desalination (MSF). By 2007, with the award of phase 1 of the next plant, M station, the costs had risen by 97 per cent to $8 a gallon for the same technology.

This trend is unsurprising as rising inflation has ushed up the cost of raw materials, says Santosh Nair, chief financial officer of Sharqiyah Desalination, which operates the Sur desalination plant in Oman. “When the original contract was signed, rebar [reinforcement steel bars] was OR170 ($441) a tonne. Now it is OR450 a tonne,” says Nair.

High inflation or not, the region must build new capacity. At the national level, GCC countries are attempting to address the expected increase in demand. Saudi state-owned desalination company Saline Water Conversion
Corporation (SWCC) forecasts water demand in the kingdom will increase to 1.83 billion g/d by 2025, compared with 1.36 billion g/d currently.

The kingdom has six power and water plants planned, including those at Ras al-Zour, Qurrayah, Yanbu, Rabigh and Jeddah. But it is not just new demand that these projects must account for - an estimated 500 million g/d of the additional capacity will replace ageing works.

Bahrain has commissioned new units on the Hidd independent water and power project (IWPP), which will provide an additional 60 million g/d of capacity, resulting in overall capacity rising to 134 million g/d. Bahrain’s Finance Ministry is also planning the first phase of the Addur IWPP, which will have a capacity of 48 million g/d and is scheduled to be commissioned in 2010.

Meanwhile, like much of Kuwait’s infrastructure, its desalination programme has suffered delays. Despite MEED figures suggesting the emirate needs installed desalination capacity of 680 million g/d by 2015, the government awarded just one desalination contract in the period 2000-06.

In Oman, the government is seeking to reduce its reliance on groundwater resources at a time when the population is expanding. The Oman Power & Water Procurement Company (OPWP) estimates annual demand will rise by 12.5 per cent a year to reach 154 million g/d by 2013.

Despite the wealth of planned investment, Patrice Fonlladosa, chief executive officer (CEO) of Abu Dhabi-based desalination company Veolia Water Middle East, says the region will have difficulty meeting expected demand in the coming years. “It is going to be a struggle, bearing in mind the speed of project completion and population growth,” he says. “Can it be caught? I am not sure.”

As demand increases, a shift is occurring in the technology used. According to a report by SWCC, thermal desalination was the dominant technology until 2002, with 77 per cent of all water in the Gulf region obtained in this way. Within this field, MSF was the process of choice. Now reverse osmosis is gaining ground in the region as it becomes cheaper in terms of energy requirements, and previous failures in using the technology, such as the 1992 Bahrain Addur plant, which has never operated above 30 per cent of its 10 million-g/d design capacity, fade into the background.

In Fujairah, hybrid plants using reverse osmosis and multiple-effect desalination (MED) technology are being pioneered. MED involves the heating of water to remove the salt with steam. It is understood to be more energy efficient than MSF but cannot be done on the same scale, although several units are usually used together and can be added to as required.

However, as is often the case in the region, there is some resistance to change. “A few still have doubts,” says Lisa Henthorn, president of the International Desalination Association (IDA). “Dubai Electricity & Water Authority in particular is sticking with MSF, but other than that, most people are open to bids with alternative technologies.”

Henthorn says the technology is becoming widely accepted in the region. “The Gulf in general has become more accepting of reverse osmosis, because the technology is becoming more robust,” she says, “That and considerably lower costs, and a greater energy efficiency.”

A considerable advantage for reverse osmosis, unlike MSF, is that it is not directly linked to power usage. “You have a winter/summer imbalance here,” says Henthorn. “We have huge energy demand in summer, but peak load drops to about 30 per cent in the winter. In a thermal desalination plant, the amount of water you are producing is directly related to the amount of power you are producing because they are co-generative. So in winter you need dedicated boilers to produce the water you need, which is extremely energy intensive.”

While there are a several physical constraints on reverse osmosis - the Gulf, with high salinity and a shallow depth, does not lend itself to reverse osmosis plants because of the poor quality of the water - one of the main drivers for its future adoption could be the cost of materials impacting on thermal desalination. “If reverse osmosis is proven to be successful here, and thermo desalination costs continue to rocket as pricing for all metallic components from China and India continues to increase, it is a no-brainer,” says Henthorn.

Veolia’s Fujairah plant, which is under construction, will be the first in the world to combine MED and reverse-osmosis technology. The plant will have a capacity of 50 million cubic metres a year, and is due to commence production in 2010.

Training staff

Fonlladosa cites another trend emerging in the desalination market, of contracts stipulating staff training to ensure plants operate at maximum capacity with minimal wastage. “In long-term contracts, there are some strong requests that you deliver training,” he says. “It is a formal request that you train staff. This is brand new, never written in terms of deeds before.

“It is only in the past two years that we have seen this appearing. And it is coming from the local authority.”

A further concern is the management of the existing water infrastructure. According to Fonlladosa, leakage in the region is higher than elsewhere. He says 30-40 per cent of water in Riyadh is unaccounted for, whereas in Paris the figure is closer to 15 per cent.

“If you can reduce those numbers - say, just save 5 per cent capacity - it is 5 per cent of investment you don’t need to do,” he says. “This is something I have noticed most of the countries in the Middle East now accept. It is not just a question of increasing capacity; it is a question of better management and addressing the question of unaccounted water.”

There is no doubt that losing less water will save money, but leakage is a fact of life for the water industry. The need for new capacity is undoubted. The only uncertainties are what technologies clients in the region will opt for.

GCC desalination demand forecasts

  • Installed capacity: 2,611 million gallons a day (m/gd)

  • Additional capacity by 2015: 2,520 m/gd

  • Investment required ($bn): $20.2bn

Source: MEED Insight GCC Power & Water report

For the full table and more on the Insight report, see the resources panel (right)

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications