Abu Dhabi's $3.6 Billion Power and Desalination Plants See Orders Flow for Tractebel and GE Power Systems

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Abu Dhabi, one of the United Arab Emirates (UAE), on the Persian Gulf continues to be a free flowing source of deals in the combined power and water production sector.

Tractebel, a Suez (NYSE:SZE) (Paris, France) business division, has just inaugurated the new 1,430 MW Al Taweelah A1 power and water plant that will produce 385,000 cubic meters of water daily. A few days before this GE Power Systems (NYSE:GE) (Fairfield, Connecticut) signed a contractual service agreement (CSA) with ITM Operation and Maintenance Company (ITM) for the Umm Al Nar Power and Water Plant in Abu Dhabi.

The $1.5 billion Al Taweelah project (PEC 98500027/31/77) contract was awarded in 2000 by the Abu Dhabi Water and Electricity Authority (ADWEA) to a 50/50 consortium of Tractebel and Total (PARIS:TOT) (Paris, France) that holds 40% of the project with the balance held by the authority.

The plant was the first and largest independent power and water (IPWP) project in the region and the power is supplied by one of the largest cogeneration plants in the world. Output represents around 25% of electricity and water output for the Emirate. The project included a major extension to an existing plant and halved CO2 emissions per kWh and cut NO2 emissions by 90%.

The $200 million GE agreement with ITM will see GE providing planned maintenance services for a period of up to 23 years for the five GE Frame 9FA gas turbines at Umm Al Nar (PEC 98500061), which is the largest plant of its kind in the middle east with a total project cost of around $2.1 billion. Plans are in place for the existing plant to be expanded. Power generation will be increased from 850 MW to 1,550 MW and, in addition, desalination capacity will be upped.

The plant general manager for ITM on site, Jim Blair, said, "For us, the benefits of this long term maintenance agreement are twofold: we can project our maintenance costs with a high degree of accuracy, and we can minimize the risk associated with the availability and parts life of the equipment installed."

ITM is jointly owned by International Power PLC (LSE:IPR) (London, UK) and Tokyo Electric Power Company (TEPCO) (Tokyo, Japan). The project was recently acquired from ADWEA and is scheduled to begin commercial operation in 2005.

Performance guarantees regarding output, heat rate and planned outage duration for gas turbines throughput the term pf contract will be provided by GE. The agreement provides a maintenance program customized to suit individual needs and includes all service, labor, parts and repairs for planned and unplanned maintenance, along with performance guarantees tailored to the plant. Umm Al Nar is the first plant in the Gulf region to use GE's F technology gas turbines.

Doosan Heavy Industries (Seoul, Korea) supplied the desalination plants for Al Taweelah ($350 million) and Umm Al Nar ($500 million), which were prefabricated at its Changwon manufacturing plant and shipped over.