MEED’S TOP 5 MOST- READ KUWAIT PROJECTS ARTICLES (AUGUST – SEPTEMBER)

Read on for full access to the top 5 stories from MEED.com : 1. Doosan wins Kuwait desalination project2. Kuwait prequalifies developers for Al-Khiran IWPP3. Kuwait prequalifies seven for integrated solar power plant4. Kuwait awards $385m solar contract5. Kuwait makes progress with major infrastructure schemes

Kuwait’s Central Tenders Committee (CTC) has approved the award of the estimated KD117.3m ($388m) contract to South Korea’s Doosan Heavy Industries to build a new reverse osmosis (RO) desalination plant in the Doha area of Kuwait.

Doosan’s winning bid was almost 10 per cent higher than the KD105.8m price submitted by the low bidder, a consortium of Spain’s Abeinsa and the local Gharnata International General Trading & Contracting. The Ministry of Electricity & Water (MEW), the client for the project, received bids from six groups on 9 June for the engineering, procurement and construction (EPC) contract.

The Doha phase one plant will have a desalination capacity of 50 million imperial gallons a day (MIGD).A second 50-MIGD phase of the project is also planned.The scheme is part of Kuwait’s efforts to expand its desalination capacity to cope with increasing demand from rapid population growth. The

ministry forecasts that an additional 270 MIGD of desalination capacity is required to meet the estimated demand by 2020.On 15 August, Kuwait’s MInistry of Finance approved KD3bn-worth of power, desalination and wastewater projects.In addition to the Doha desalination EPC project, Kuwait’s public-private partnership (PPP) body, the Kuwait Authority for Public Partnerships

(KAPP), is pushing ahead with major power and desalination schemes.In August, KAPP released the lists of prequalifiers for the Al-Zour North 2 and Al-Khiran 1 independent water and power projects (IWPPs),

which will have desalination capacities of 102 MIGD and 125 MIGD respectively.

1. DOOSAN WINS KUWAIT DESALINATION PROJECT

31 August 2015 8:18 GMT | By Andrew RoscoePlant will have capacity of 50 million imperial gallons a day•South Korean contractor Doosan Heavy Industries appointed to build desalination plant•Doosan submitted second-lowest bid for reverse osmosis facility•Winning price was almost 10 per cent higher than low bid

The Kuwait Authority for Public Partnerships (KAPP) has prequalified seven consortiums to participate in the bidding process for the planned Al-Khiran 1 independent water and power project (IWPP).

KAPP has prequalified the same seven lead developers for the Al-Khiran 1 IWPP as it has for the Al-Zour North 2 IWPP, which MEED reported on 16 August.

In addition to prequalifying groups to participate in the tender, KAPP, in partnership with the Ministry of Electricity & Water (MEW), has increased the planned power capacity of the Al-Khiran IWPP to 1,800MW from the previously planned 1,500MW. The desalination capacity of the plant remains at 125 million imperial gallons a day (MIGD).

The seven prequalified groups are led by the following developers:– Abengoa (Spain)– Acwa Power (Saudi Arabia)/Al-Mulla (local)– Kepco (South Korea)– Marubeni (Japan)/Fouad al-Ghanim (local)– Mitsubishi (Japan)– Mitsui (Japan)– Sumitomo (Japan)

The Al-Khiran site will be located on the coast about 100km south of Kuwait City. KAPP and MEW are also planning to develop a second phase, a 1,800MW independent power project (IPP), by 2029 at the Al-Khiran site.

While KAPP and MEW conducted the prequalification process for both the AL-Zour North 2 and Al-Khiran 1 IWPP simultaneously, the clients are expected to stagger the submission dates by six months due to the size of the projects and the fact that the same seven developers have been prequalified for both tenders. The Al-Zour North 2 IWPP is likely to be the first tendered, according

to sources close to the IWPP programme.Progress with both projects stalled as a result of the restructuring of KAPP’s

predecessor, the Partnerships Technical Bureau (PTB). The restructuring of Kuwait’s PPP body, which happened in parallel with the amendments of the country’s PPP and IWPP laws, was implemented in response to the slow procurement process for the country’s first PPP project, the Al-Zour North 1 IWPP.

In December 2013, the final project agreements for the much delayed Al-Zour North IWPP were signed. The project company set up to develop the IWPP, which is 40 per cent owned by a consortium of the UK/French GDF Suez, Japan’sSumitomo Corporation and local Abdullah Hama al-Sagar & Brothers, awarded South Korea’s Hyundai Heavy Industries(HHI) and France’s Sidem the $1.4bn EPC contract to build the plant.

HHI will build the gas-fired 1,500MW, combined-cycle power plant, while Sidem will build the 107 million gallon-a-day desalination component of the first Al-Zour project.

The country’s IWPP programme is part of the government’s efforts to meet the rapid demand growth for both power and water.

Kuwait’s Ministry of Electricity and Water forecasts that peak power demand will climb from 12,800MW in 2013 to 14,000MW in 2015 and to 22,500MW by 2022. To meet the demand and build in a reserve margin of about 10 per cent, the ministry estimates that available conventional power capacity will have to reach 25,500MW by 2022, an 80 per cent growth in capacity.

2. KUWAIT PREQUALIFIES DEVELOPERS FOR AL-KHIRAN IWPP

23 August 2015 8:38 GMT | By Andrew RoscoeSeven groups prequalified to participate in bidding for Kuwait’s third planned IWPP•Same seven lead developers have been prequalified for Al-Khiran and Al-Zour North 2 IWPPs•Power capacity has been increased by 300MW to 1,800MW

The Kuwait Authority for Partnership Projects (KAPP) has prequalified seven groups for the contract to develop the Al-Abdaliyah integrated solar combined-cycle (ISCC) plant.

KAPP, formerly called the Partnerships Technical Bureau (PTB), is Kuwait’s public-private partnership (PPP) body and is overseeing the development of the scheme in partnership with the Ministry of Electricity & Water (MEW).

KAPP invited companies to submit prequalification entries in May.The seven prequalified groups, with lead developer specified, are:Acwa Power (lead; Saudi Arabia) / Al-Mulla Group (local) / Acciona Energia

(Spain)Abengoa (lead; Spain) / Sojitz (Japan) / Alghanim International (local)EDF (lead; France) / Toyota (Japan) / Al-Sager (local) / TSK (Spain)Korea Electric Power Corporation (lead; South Korea) / Kharafi National (local) /

Aries Energy (US)GDF Suez (lead; now called Engie; France/UK) / Elecnor (Spain)JGC (Japan)RWE (lead; Germany) / Ali Kharafi (local)The ISCC facility, which will run on a combination of solar power and gas, will

have a total capacity of 280MW. The plant will contain a 60MW solar

component. The project will be located in Al-Abdaliyah in southwest Kuwait, and will be located on an area spanning 2 square kilometres.

KAPP, in collaboration with the MEW, will oversee the creation of a joint stock project company that will build, operate and transfer (BOT) the project for an investment period of 25 years. The project company will sign an Energy Conversion and Power Purchase Agreement (ECPA) with the MEW, with the ministry being the offtaker for the electricity generated by the plant.

The UK’s HSBC was appointed as financial consultant for the scheme in September 2013.

As with the other PPP projects planned in Kuwait, the Al-Abdaliyah scheme has faced several delays as the government reformed its PPP implementation body and amended the PPP legislation in 2014.

However, there now appears to be a strong commitment from KAPP and the MEW to push ahead with major utility projects, following the announcement of prequalified groups for the Al-Zour North 2 and Al-Khiran 1 independent water and power projects (IWPPs) earlier in August.

Kuwait’s first IWPP is currently under construction, with the developer contract awarded to a consortium led by GDF Suez in December 2013.

3. KUWAIT PREQUALIFIES SEVEN FOR INTEGRATED SOLAR POWER PLANT30 August 2015 5:46 GMT | By Andrew RoscoeProject will run on solar power and gas•Facility is being developed as a public-private partnership (PPP) project•Project is part of Kuwait’s 15 per cent renewable energy target by 2030

The Kuwait Institute for Scientific Research (Kisr) has awarded a $385m contract to a consortium of Spain’s TSK Electronica and the local Kharafi National to build a 50MW concentrated solar power (CSP) plant at its Shagaya renewable energy park.

The TSK-led group had submitted the low bid for the scheme, and had been expected to win the contract. The solar plant is scheduled to come online in December 2017.

Speaking at the Global Solar Leaders Summit in Dubai on 14 September, Suhaila Marafie, the director of research and studies for Kuwait’s Ministry of Electricity & Water (MEW), said the CSP deal had been signed two days previously.

The scheme, which will be Kuwait’s largest solar project, was retendered in December 2014, after bids were originally submitted in November 2013.

Kisr, which is developing the pilot scheme in partnership with the MEW, received bids from six bidders in November 2013, and in March 2014 Kuwait’s Central Tenders Committee (CTC) approved the award of the deal to the fourth-lowest bidder, Spain’s Cobra, which had submitted a price of KD139.1m ($494.3m).

The TSK/Kharafi joint venture had submitted a low bid of KD101.3m, and had

been expected to win the contract. However, the first three bids were disqualified from the evaluation process, and the CTC approved Cobra’s bid.

According to sources in the country, the client’s reluctance to award the deal to the fourth-lowest bid has resulted in the retendering of the scheme.

After signing the substation project and 34 kilometres of overhead lines in 2014, Kisr inked deals for a 10MW photovoltaic (PV) plant and a 10MW wind farm in February and March this year respectively, said Salem al-Hajraf, head of energy research at Kisr. “Today we concluded four years of effort to bring this initiative to reality, and will officially start groundbreaking on the initial contract on the Shagaya renewable energy park.”

The 50MW CSP scheme is the largest of three projects that Kisr has tendered and awarded to date for its Shagaya development. In February this year, Kisr signed a contract with the TSK/Kharafi National joint venture to build the 10MW photovoltaic (PV) solar plant, In March, it appointed a consortium of Spain’s Elecnor and the local Alghanim International General Trading & Contracting to build the 10MW pilot wind scheme.

4. KUWAIT AWARDS $385M SOLAR CONTRACT14 September 2015 11:50 GMT | By Andrew RoscoeProject will be country’s largest renewable energy project to date•Consortium of Spain’s TSK Electronica and the local Kharafi National win the contract•Award goes to low bidder•Plant expected to come online in late 2017

Kuwait’s Central Tenders Committee (CTC) has approved the award of a $4.3bn contract to a joint venture of Turkey’s Limak and the local Kharafi National to build the new passenger terminal at Kuwait International airport (KIA), only two weeks after bids were submitted.

The speed of the contract award, following the resubmission of bids in early August, has pleasantly surprised many within Kuwait’s business circles and has increased optimism that the country can finally become a lucrative market for contractors and consultants across its projects markets.

The Limak/Kharafi National consortium’s $4.3bn bid was nearly $250m lower than its original offer, which was made in November 2014 during the first round of bidding. The project was retendered by the Ministry of Public Works (MPW) earlier this year, after it deemed the original offers as too high. The authority also said the technical proposals were inadequate.

The award of the airport deal came less than a week afterKuwait National Petroleum Company (KNPC) announced it had awarded the $1.57bn final package on the $11.5bn Al-Zour North New Refinery Project (NRP), which, like the airport, had suffered numerous delays in the tendering and bidding stages.

Those within Kuwait’s projects and economic sectors say progress with the long-delayed schemes has improved sentiment over the country’s development aims, despite lower oil prices.

“The progress with the airport and Al-Zour projects has led to positive sentiment and shows there is commitment to deliver these schemes,” says an economist at a major local bank. “Much of the focus now is on oil prices, and the question that is always asked is: will this lead to a cut down in planned projects?”

“With regards to all these major projects recently awarded and under bidding, the answer is no. These projects have been delayed for years and, like the airport, are urgent, so clients know they need to get something going.”

While government clients award major construction contracts, Kuwait’s recently reformed public-private partnership (PPP) body, the Kuwait Authority for Partnership Projects (KAPP), is

pushing ahead with the procurement process for the country’s next two independent water and power projects (IWPPs) – Al-Zour North 2 and Al-Khiran 1.

Progress with the IWPPs stalled in 2014 as a result of the restructuring of KAPP’s predecessor, the Partnerships Technical Bureau (PTB). The restructuring, which happened in parallel with the amendments of the country’s PPP and IWPP laws, was implemented in response to the slow bidding process for the country’s first PPP project, the Al-Zour North 1 IWPP.

However, progress with the schemes has been much swifter in 2015, and between 16 and 23 August, KAPP announced it had prequalified seven groups to participate in the bidding for each project.

Groups preqThe Al-Zour North 2 IWPP will have a power capacity of at least 1,500MW, to be provided through

combined-cycle gas turbines, and a desalination capacity of 102 million imperial gallons a day (MIGD). As with the first phase, the Al-Zour North phase two project will use natural gas as the main feedstock, and gas oil will be provided by the Ministry of Electricity & Water (MEW).

The Al-Khiran 1 project will have larger generation and desalination capacities, with the plant producing 1,800MW of power and 125 MIGD of desalinated water respectively. The site will be located on the coast about 100 kilometres south of Kuwait City. KAPP and MEW are also planning to develop a second phase, a 1,800MW independent power project (IPP), by 2029 at the Al-Khiran site.

While KAPP and MEW conducted the prequalification process for both the Al-Zour North 2 and Al-Khiran 1 IWPPs simultaneously, the clients are expected to stagger the submission dates by six months due to the size of the projects and the fact that the same seven developers have been prequalified for both tenders.

The Al-Zour North 2 IWPP is likely to be the first tendered, according to sources close to the IWPP programme.

5. KUWAIT MAKES PROGRESS WITH MAJOR INFRASTRUCTURE SCHEMES25 August 2015 5:24 GMT | By Andrew Roscoe Airport contract approved days after final deal was awarded for Al-Zour North refinery•A $4.3bn contract for Kuwait’s new airport terminal was awarded two weeks after bids were submitted