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Researched by Industrial Info Resources (Sugar Land, Texas)--Although countries in the Gulf region of the Middle East appear to be riding on the crest of an oil price windfall wave, they have a range of challenges that are beginning to bite and will grow through 2020. Faced with the global shortage of project resources and people, the Gulf countries are feeling the pressures of rising prices and this, in conjunction with currency exchange differentials, is priming inflation and bringing a dose of reflection to the headlong pace of development in the hydrocarbon-rich region.
Another basic challenge is in providing a power supply that keeps pace with industrial development and diversification and provides the young and growing middle class with the means to fulfill their lifestyle aspirations.
At the MEED 10th Middle East Project Finance conference in Bahrain, it was reported that Bahrain is looking to double its power capacity by 2020 to 5,000 megawatts (MW). Dr. Ranald Spiers, International Power's Middle East/ North Africa (MENA) Chief Executive, said the country's water requirement would also almost double from 120 million gallons to 220 million gallons per day over the same period. Spiers said the Gulf countries' current capacity of 47,000 MW would need an additional 50,000 MW through 2020. Saudi Arabia, with a current capacity of 26,000 MW, needs an additional 30,000 MW by 2020. Saudi Arabia's gas is being diverted to petrochemical production leaving a shortage for power generation. The Gulf News reported Spiers saying that despite the global debt problems and rising costs, the trend toward major projects is likely to continue because of "unprecedented demand." He said that equity was still active in the region "chasing projects."
A shortage of gas is forcing Dubai to plan for 4,000 MW of power to be generated from coal-fed power stations for which unidentified sites have been allocated. Fuel oil has been used to source power in the face of the gas shortage, but coal power feed is seen to be more cost-effective in the long term.
The country is also pursuing plans to import electrical power from Iran and develop nuclear plants. The Dubai Electricity & Water Authority is thought to favor Fujairah over Dubai for the coal-fed station as barges would offload without entering the Gulf. In Dubai shippers would have to pay high insurance rates and face more complicated handling.
Oman is also looking at coal-fed power, but both counties may have to rethink their plans as the global price of coal soars. A balance might be found between the income from exported gas and LNG and the cost of powering domestic markets. Present plans are reminiscent of the old UK industrial heyday saying of "carrying coals to Newcastle," except in this case, the coals at Newcastle are the Gulf's enormous gas reserves.
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process and energy related industries with products and services ranging from industry news, forecasting, plant and project databases, as well as multimedia advertising campaign assistance.
Another basic challenge is in providing a power supply that keeps pace with industrial development and diversification and provides the young and growing middle class with the means to fulfill their lifestyle aspirations.
At the MEED 10th Middle East Project Finance conference in Bahrain, it was reported that Bahrain is looking to double its power capacity by 2020 to 5,000 megawatts (MW). Dr. Ranald Spiers, International Power's Middle East/ North Africa (MENA) Chief Executive, said the country's water requirement would also almost double from 120 million gallons to 220 million gallons per day over the same period. Spiers said the Gulf countries' current capacity of 47,000 MW would need an additional 50,000 MW through 2020. Saudi Arabia, with a current capacity of 26,000 MW, needs an additional 30,000 MW by 2020. Saudi Arabia's gas is being diverted to petrochemical production leaving a shortage for power generation. The Gulf News reported Spiers saying that despite the global debt problems and rising costs, the trend toward major projects is likely to continue because of "unprecedented demand." He said that equity was still active in the region "chasing projects."
A shortage of gas is forcing Dubai to plan for 4,000 MW of power to be generated from coal-fed power stations for which unidentified sites have been allocated. Fuel oil has been used to source power in the face of the gas shortage, but coal power feed is seen to be more cost-effective in the long term.
The country is also pursuing plans to import electrical power from Iran and develop nuclear plants. The Dubai Electricity & Water Authority is thought to favor Fujairah over Dubai for the coal-fed station as barges would offload without entering the Gulf. In Dubai shippers would have to pay high insurance rates and face more complicated handling.
Oman is also looking at coal-fed power, but both counties may have to rethink their plans as the global price of coal soars. A balance might be found between the income from exported gas and LNG and the cost of powering domestic markets. Present plans are reminiscent of the old UK industrial heyday saying of "carrying coals to Newcastle," except in this case, the coals at Newcastle are the Gulf's enormous gas reserves.
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process and energy related industries with products and services ranging from industry news, forecasting, plant and project databases, as well as multimedia advertising campaign assistance.
