The Kingdom of Saudi Arabia is the largest of the GCC countries. The country has the largest population at 30.77 million. The country has 16% of all proven oil reserves in the world. Even as the country attempts to diversify its economy, almost 80% of the budget revenues, 90% of export earnings and almost 45% of the GDP is accounted for by hydrocarbons. Despite having aquifers like Saq, Wajid, Tabuk, Dhurma, Dammam, and others, the water here is highly brackish. With a declining level of precipitation, the country derives 70% of its urban water supply from desalination. A conscious move away from reliance on hydrocarbons has put an increased stress on water availability, as industries, businesses and the population increases, which requires an increase in the current desalination capacities. As of 2015, the desalination market in Saudi Arabia was worth USD X.X billion. The market size is expected to grow at an XX.X% CAGR from 2016 to 2022.
The depleting natural precipitation and ground-water levels and increasing population are the major drivers of the sector in the region. A continued effort at increasing diversification of government income from hydrocarbons is another factor that has led to an increase in construction projects, industries, manufacturing plants, etc., leading to more demand for fresh water. Moreover, the government is supporting and encouraging the establishment of desalination plants to meet the nation’s demands.
Restraints and Challenges
The biggest challenge of desalination is the cost. As per a study, the cost of desalinated water per meter cube was USD 1.04, 0.95 and 0.82 for MSF, MED, and RO, assuming a fuel cost of USD 1.5/ GJ. Moreover, energy accounts for approximately three-fourths of the supply cost of desalination. Transportation cost is also added to the overall cost, making desalination a very costly process. Another negative impact of desalination is on the environment with the treatment of brackish water leading to pollution of fresh water resources and soil. Discharge of salt on coastal or marine ecosystems also has a negative impact.
As suggested by the ECRA reports, USD 80 billion is expected to be spent on desalination projects in Saudi Arabia over the next two decades, presenting a lot of attractive opportunities for private sector involvement. Private sector investment in building as well as financing desalination plants are conducted through purchasing of their services (such investors and technology transferring builders are called IWPPs or Independent Water and Power Producers) by WEC, or the Water and Energy Corporation, an off-taker for desalinated water produced by private operators. The purchase is made for Power and Water Agreements (PWAs), signed for a period of 2 decades.
- In April 2014, production began at the new SR 27 billion (USD 7.2 billion) Ras Al Khair desalination plant for SWCC, around 75 km northwest of Jubail on Saudi Arabia’s east coast. The facility will be able to produce 1.025m cu meters per day, making it the world’s biggest desalination facility in the world when it is running at full production capacity. At that stage, it will supply 800,000 cu meters per day to Riyadh, 100,000 to the Al Washm, Sudair, Majma, Al Zulfi and Al Ghat regions and a further 100,000 cu meters per day to regions north of the Eastern Province. The plant is a hybrid model using both the MSF technique and RO technologies. It has eight MSF units, built by Doosan Heavy Industries in Vietnam and South Korea, and 17 RO units. Offshore, 3-km discharge pipes have been built along with two 1.4-km breakwaters and a seawater intake pump house.
- On Saudi Arabia’s Red Sea coast, work on the SR16billion (USD 4.3billion) Yanbu 3 desalination plant for SWCC is also under way. This will provide an additional 550,000 cu meters per day to 1.8 million residents in the industrial city of Yanbu and to people in the Medina area. Doosan Heavy Industries and Construction of South Korea won the contract to build Yanbu 3. The plant will use six huge evaporators, each weighing almost 6000 tons. Four are being made in Vietnam and two in Saudi Arabia by Bilfal Heavy Industries. The USD 3 billion EPC contract was awarded to a consortium including Shanghai Electric, Samsung Engineering, and Al Toukhi Company. Construction work is due to be completed by March 2016.
- In January 2015, a joint venture involving Riyadh’s ACWA Holding and Japanese engineering firms Itochu Corporation and Sasakura Engineering was awarded a USD 120 million contract for the expansion of the Shuaibah 2 desalination plant. The 91,200-cu-metre-per-day plant will use MED with thermal vapor compression technology. Shuaibah 2 was first opened in 2003 and has the capacity to produce 880,000 cu meters per day.
- In February 2015, global engineering consultancy Black and Veatch announced it had been chosen as the engineering and design consultant for SWCC’s Jeddah 4 desalination project, a 400,000-cu-metre-per-day RO plant designed to augment drinking water supplies to the city of Jeddah. Black and Veatch will be responsible for preparing studies of the site and sea conditions and drawing up conceptual and engineering briefs for the scheme, as well as supporting SWCC.
- Saudi Arabia will be making the world’s largest solar powered plant, capable of treating 60,000 cubic meters a day.
About the Market
PESTLE Analysis (Overview): Macro market factors pertinent to this region
Market Definition: Main as well as associated/ancillary components constituting the market
Key Findings of the Study: Top headlines about market trends & numbers
- Drivers: What are the key factors driving growth in the market?
- Restraints: Most relevant threats and restraints that hinder the growth of the market
- Opportunities: Sectors of high return or quick turnaround on investment
- Market Concentration: Porter’s 5 Forces Analysis quantified by a comprehensive list of parameters
- Market Share Analysis: Top players in the market (by value and volume)
- Company Profiles: Pertinent details about leading, high growth, and innovation-motivated stakeholders with contact, operations, product/service offerings, financials, and strategies & insights.
1. EXECUTIVE SUMMARY
2. RESEARCH APPROACH AND METHODOLOGY
3. SAUDI ARABIA DESALINATION MARKET OVERVIEW
3.2 Desalination Capacity Forecast to 2022
3.3 Recent Trends and Developments
3.4 Government Policies and Regulations
4. MARKET DYNAMICS
5. PESTLE ANALYSIS
6. KEY PROJECT INFORMATION (PROJECT NAME, STATUS, LOCATION, CAPACITY, OWNER DETAILS)
6.1 Existing Projects
6.2 Projects in Pipeline
6.3 Upcoming Projects
7. KEY COMPANY PROFILES (BUSINESS OVERVIEW, PRODUCTS AND SERVICES, FINANCIALS**, RECENT DEVELOPMENTS)
7.1 Advanced Water Technology (AWT)
7.2 Doosan Group
7.3 Saline Water Conversion Corporation (SWCC)
7.4 Hyflux Ltd
7.5 (List not Exhaustive)
8. COMPETITIVE LANDSCAPE
8.1 Mergers & Acquisitions
8.2 Joint Ventures, Collaborations and Agreements
9. FUTURE OF THE MARKET
10.2 Contact Us
**Subject to availability on public domain