Take any new power project in the Middle East and the chances are that Germany's Siemens Power Generation Group (PG) has been involved in it one way or another. From Algeria to Yemen, in the past 18 months Siemens PG has scored almost everywhere - both as a turnkey contractor and as a turbine supplier.
'It has been an exceptional year,' says Jens-Peter Saul, vice-president for Middle East sales at Siemens PG. 'Can it get any better? It will be extremely difficult to repeat a year like this. With this fantastic result it is almost impossible to increase our market share further, but we are very optimistic that we can reinforce our leading position, in particular on the large-scale projects front.' As it stands, Siemens has managed to secure an overall market share of about 60 per cent of new orders in the Arabian peninsula, according to Saul. But it is particularly strong in certain areas. 'In the IPP [independent power project] and IWPP [independent water and power project] market for EPC [engineering, procurement and construction] turnkey contractors, our share is closer to 80 per cent for new orders in the past 12 months. And that figure is 100 per cent when it comes to installed gas turbines for this market. It means that every new IPP/IWPP opened in the past 12-18 months in the Gulf will have a Siemens gas turbine installed.' The Gulf countries in particular have proven to be fertile ground for Siemens PG, which covers the entire generation sector, with the exception of small industrial power plants. Over the past 12 months, the company was awarded the EPC job on Bahrain's first IPP at Al-Ezzal, which was followed by the successful signing of another EPC contract for the Ras Laffan IWPP in Qatar. In the UAE, Siemens earlier this year won the EPC contract on the large-scale Taweelah B IWPP. The focus has now shifted to neighbouring Saudi Arabia. Siemens has been nominated as the main EPC contractor by the developer team negotiating the key project agreements with Water & Electricity Company (WEC) on the kingdom's first IWPP at Shouaiba. Add to that new orders from Algeria, Egypt, Syria and Yemen, and the list of projects with Siemens involvement grows even longer. 'The region has increased significantly in importance in recent years,' says Saul. 'In the past we would receive annual orders worth Eur 200 million-400 million [$250 million-500 million] from there, in extremely good years maybe up to Eur 600 million [$750 million]. For 2005 we have already secured new orders worth more than Eur 1,300 million [$1,600 million], including the Taweelah B project, for which we expect the NTP [notice to proceed] in October. And this is for the Arabian peninsula only.' The reason for the sales surge is obvious. The Gulf states have entered a period of unprecedented economic growth, fuelled by a mix of strong oil prices and high production levels, high liquidity and low interest rates. The trend is underpinned by a growing industrial base and fast rising populations, notably in Saudi Arabia, which is putting upward pressure on power demand. However, although Gulf countries are driving the buoyant market conditions - annual GCC power requirements have gone up from about 4,000 MW to 6,500 MW, Saul says - the region as a whole is witnessing growth rates of 5-15 per cent a year. From North Africa to the Levant to the Gulf, they all have one thing in common: more power is needed. Much, though not all, of this power will be supplied from private sector projects. Bahrain last year decided to introduce the IPP model for the first time and Saudi Arabia is going down the same route. Countries that have already established a private power track record, such as the UAE, Oman and Qatar, are expanding their programmes. 'Apart from a few countries, we see a trend towards more private power projects,' says Saul. 'But if countries choose to go down that path they
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