Doosan Wins Power and Water Project as Emirate's Development Making Fujairah a Foreign Investment Target

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Rising demand for power and desalinated water continues to produce a series of new projects in the UAE and Persian Gulf states. Doosan Heavy Industries and Construction (KSE:034020)(Seoul, Korea), already laying claim to being the world's largest supplier of desalination systems, has been awarded the $410 million contract for the construction of a 585 MW power and water plant in Sohar, Oman.

The project will be the largest power and water project in Oman with a production capacity of 150,000 tons (33 million gallons) of water per day and will service around 500,000 people in the Sohar area, which is 200 kilometers southwest of Oman's capital, Muscat. The contract was awarded by Tractebel EGI Middle East for the Sohar Global Contracting and Construction Company, a subsidiary of Suez Tractebel (NYSE:SZE) (Paris, France), the main contractor in Muscat. See related November 20, 2003 news article: Abu Dhabi's $3.6 Billion Power and Desalination Plants See Orders Flow for Tractebel and GE Power Systems.

Doosan is planning to use its own technology covering the EPC elements of the contract, as well as the erection and commissioning of the project, which is scheduled for completion in April 2007. Doosan has already completed ten desalination projects in the Middle East, starting with Farasan in Saudi Arabia in 1979, through to the Fujairah projected completed in the UAE at the end of 2003. From the start of the 1990s, the company has logged $2.9 billion worth of orders for water and power projects, with a total capacity of two million tons of water a day.

In Bahrain, the electricity ministry is asking the government for $1.86 billion to upgrade power facilities, after a recent day-long power blackout brought the country to a halt. Residents took refuge from the 39°C heat in air-conditioned cars, and power was not restored until late evening.

Government approval is being sought for a plan covering the upgrading of existing power and water projects and to build new plants over the next four years. The new plants would be in addition to the $500 million Al-Ezzel plant project announced in August 2004 and due to bring an extra 1,000 MW into the grid by 2007. See related August 12, 2004 news article: Construction begins on $500 million Al-Ezzel Bahrain Power Project.

Government sources say that the blackout was caused by a surge in the Alba aluminum smelter power grid, which is linked to the national network. A committee is investigating the incident.

In the Northern Emirates region, covering Ras Al Khaimah, Ajman, Fujairah, Umm Al Qwain, and a part of Sharjah, residential and industrial development will cause the demand for power to double in the next five years, from the present 1,140 MW.

Government is targeting major foreign investments across a range of sectors and it is reported that there is the possibility of a steel plant and a metals company coming to Fujairah, which would require a major power feed. This location is favored for future power investment because of its coastal position.

Current demand is being met by Fujairah Electricity and Water Supply (FEWA) and Union Water and Electricity Supply (UWEC). UWEC has announced the completion of a new 68-kilometer, 400 kV transmission line from Fujairah to Al Dhaid, Sharjah.

The local Khaleej Times reports that the future of the power industry in the Gulf depends to a great extent on the development of internal, regional, and cross-regional grids. The report says that the Gulf enjoys the added advantage of an abundance of resources in terms of natural oil and gas.

With an eye to Fujairah's prospects the report says that, at present, Abu Dhabi is attracting foreign investments in the power sector by throwing open participation to foreign companies in terms of privatization. It adds that Abu Dhabi has undertaken feasibility studies to assess the potential demand for power in the northern emirates.