The GCC steam turbine MRO (maintenance, repairs and overhaul) service market will continue to grow at a moderate pace at the rate of 8 per cent until 201, a Frost & Sullivan study shows. The spike in demand for power and petrochemical products saw the rise in installation of steam turbines, which in turn has revved up the need for maintenance and regular service of these steam turbines, it says.
Upcoming projects in petrochemical industries such as the Kuwait Styrene Company and Kuwait Paraxylene Production Company are expected to boost the market for steam turbines.
The participation of major service providers will energise prospects for the turbine services market and they are investing heavily in the facilities they have established in the GCC region. High investments in sectors such as oil and gas, process industries and power generation will fuel the demand for turbine services in the near future in the GCC area. Turbines serviced in Bahrain are utility steam turbines.
New analysis from Frost & Sullivan’s GCC steam turbine MRO service market finds that the market earned revenues of $95 million in 2008 and estimates this to reach $114.2 million by 2013.
Kuwait largest market
“Kuwait is estimated to be the largest market both in terms of revenue and units; more than 50 per cent of the turbines serviced in Kuwait were light industrial turbines, hence accounted for lesser revenue when compared to units,” says Frost & Sullivan research analyst Shwetha Shivarama. “The country is expected to be a major participant even in the future with a regional share of 30 per cent in revenues followed by Saudi Arabia and the UAE.”
Though market prospects are upbeat, there are some challenges restraining forward momentum. The region is faced with a shortage of skilled manpower for turbine services and hence, service providers are forced to recruit people from other regions, especially South Asia, Southeast Asia, and Europe. Moreover, the localisation policy of governments in the GCC has inhibited the growth of turbine service facilities in the region.
Steam turbines, which are technically easier to service compared to gas turbines, are sometimes serviced in-house by end users. The establishment of central workshops by end users narrows the scope for external services. As a result, service providers suffer revenue loss and the overall market growth is curtailed.
“Service providers are addressing this issue by imparting training to locals to enhance skills,” says Shivarama. “Third party service providers are ramping up capabilities to address the service requirements of prospective clients.”
Apart from this, end users in the petrochemical and oil and gas segment are displaying a preference of OEM services, and this prevents third-party service providers from foraying into these important end-user segments.
Process industries opt for turbine servicing by OEMs rather than by third-party service providers for their quality service and the availability of critical spare parts. New private utility facilities are gravitating toward long-term service agreements (LTSAs) with OEMs.
