With the significance attached to the industrial cities of Jubail and Yanbu as key contributors to the Saudi economy, the role of suppliers of power and water can hardly be exaggerated.

Marafiq, the Power and Water Utility Company for Jubail and Yanbu, is serving the twin objectives of providing services as a utilities company and encouraging world-class private enterprises to invest  and make a contribution in their specialist fields.
With the Royal Commission for Jubail and Yanbu, Saudi Aramco, Sabic and the Public Investment Fund as the main owners and with seven private investors contributing less than 1 per cent of the remaining shares, Marafiq started operating at the beginning of 2003, with SR2.5 billion ($666 million) of initial owner equity. The company has initiated projects that are among the most notable of their kind including the world’s largest independent water and power project (IWPP) in Jubail. It plans another one at Yanbu which will be of no mean proportions.
The landmark Jubail project will provide support to the flourishing industrial city of Jubail which has moved into its second phase and which like Yanbu is home to giant petrochemical industries among other ventures.
Now that an agreement for the financing of the $3.5 billion IWPP has been accomplished, construction of the project can go on unfettered to produce 2,750 MW of electricity and 800,000 cu m of desalinated water per day by the end of 2010.
Working at implementing the Jubail IWPP, the largest privately financed water and power project under development, is a consortium that includes General Electric, Hyundai and Sidem.  The project sponsors are Suez Energy, the Arabian Company for Water and Power Projects and Gulf Investment Corporation.
Interestingly, the IWPP is the largest privately financed water and power project under development with lead arrangers including BNP Paribas, Gulf International Bank, Samba and the Korean Export Insurance Corporation (KEIC), which has provided a $650 million facility that comprises the largest guarantee it has ever issued. A $600 million Islamic facility is the largest for the sector and makes the IWPP significant on several fronts.
Sidem, part of the construction consortium, is the thermal desalination specialist of Veolia Water Solutions and Technologies. Its part of the contract is worth $945 million and its scope covers the design and build of the desalination plant.
Veolia WST-Sidem will supply the thermal desalination units by recuperating the heat from the power station. General Electric will assure the supply of the power station equipment and Hyundai Heavy Industries will be responsible for the construction of the sea water intake unit and sending the reject into the sea.
Sidem has announced that the desalination plant will be based on its unique Multiple Effect Distillation (MED) process and include 27 desalination units, each having a capacity of 29,630 cu m per day, and a remineralisation plant. The MED technology recovers the exhaust heat from the power plant and uses it to evaporate seawater at low temperature. As its electrical consumption is low, only one third of that of competing processes, it is considered an ideal solution for addressing the normally large energy consumption required for desalinating sea water.
“The challenge of designing and building a plant that will produce 800,000 cu m of desalinated water per day requires great coordination and understanding between all parties concerned,” said Antoine Frerot, chief executive officer of Veolia Water.
“As leading specialists in this sector, we are able to implement the latest state-of-the-art solutions and technologies that will contribute to the successful realisation of such an impressive project.”
As regards GE’s contribution, the company will ship equipment from the end of February 2008 through the end of January 2009. Block 1 is scheduled to enter commercial service during the second quarter of 2009, block 2 in the third quarter of 2009, block 3 during the fourth quarter of the year and block 4 during the first quarter of 2010. Natural gas is the primary fuel with distillate oil as a backup. GE’s facilities in Greenville, South Carolina, USA, will manufacture the gas turbines while the steam turbines will be built in Schenectady, New York.
The Marafiq agreement was one of several deals that GE has signed in Saudi Arabia. These include a second project agreement for the Riyadh Power Plant No 9 with Saudi Electric Company and three other contracts with SEC for Qurayyah, Faras and Riyadh Power Plant No.8.  SEC has said it will add service contracts covering maintenance activities for those projects.
Abdullah Taibah, region executive for GE Energy, commented: “Saudi Arabia’s electricity use has been increasing at a rate of about seven per cent a year, and the Industry and Electricity Ministry estimates that the kingdom will require up to 20 gigawatts of additional power generating capacity by the year 2019. We are committed to helping our customers in Saudi Arabia meet this demand for reliable power.”
Marafiq’s utility plants in Jubail comprise 12 Km of canals delivering filtered seawater to industries for their cooling operations, two desalination plants producing potable water for household use, and a sanitary and industrial wastewater treatment plant.

The Yanbu IWPP
Marafiq’s proposed IWPP at Yanbu, 350 Km north of Jeddah on the Red Sea, consists of a power plant of 1,500 to 2,000 MW and a desalination plant of capacity of up to 600,000 cu m of water per day. It was announced that a request for proposals would be completed this month (October) after finalisation of the scope of the project. The advisory team for the project is led by HSBC which includes Allen & Overy and Germany’s Lahmeyer International.
The preliminary results show that building approximately 1,500 MW of new power generation is likely to be feasible by late 2009 or early 2010 to meet the growing power requirement in Yanbu. The shortfall of potable and process water in Yanbu during the same period is likely to be 34,000 cu m per day. To optimise the water production capability of the IWPP, surplus water will be made available to users outside the industrial city.
In Yanbu, Marafiq’s seawater cooling, desalination, wastewater treatment and power generation, transmission and distribution plant constitutes an integrated power and water utility system which is regarded as one of the largest utility complexes of its kind in the world.

Marafiq sees potential
The two cities are set to grow at a rapid pace. “As the nearest and most viable provider of utility services, it plans to provide integrated services common to all customers in a plug-and-play concept designed to reduce their capital cost,” a company statement says. “In addition to power and water, Marafiq intends to provide other essentials such as steam, air and gas as a central utility service. The company may even offer other central services such as financial, human resources, materials and communication services to help customers reduce their overheads.”
Prince Saud bin Abdullah bin Thunnayan Al Saud, Marafiq’s chairman, has said that the company’s successes as a pioneering utility company vindicated the government’s decision 30 years ago to build the two industrial cities of Jubail and Yanbu in order to diversify its income and reduce its reliance on the oil sector.
“The industrial cities of Jubail and Yanbu have grown into two beacons of light on the kingdom’s road to national economic development and privatisation. The two cities have been a resounding success in establishing an industrial support base and infrastructure to encourage domestic and international investment in primary and secondary industries, and provide job opportunities for Saudi nationals. With initiatives such as the formation of Marafiq, the kingdom has been able to sustain its growth and development programme, keep pace with global economic changes and requirements and supply existing and future industries with essential services at competitive prices,” the chairman added.