Moving from Oil to Gas-Feed, Syria Targets a Secure Power System by 2010

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Researched by Industrialinfo.com (Industrial Information Resources; Houston, Texas). With a total electrical power generation capacity of about 8,000 MW Syria is aiming to add another 3,000 MW, at an estimated cost of $2 billion, to the total by 2010. This is ambitious, not only in terms of being a 38% leap in capacity, but also because investment funds have been scarce, and the country's policy of not allowing foreign ownership has hindered the facilitation of power plant deals. In the center of the Middle East cauldron, Syria has seen some economic growth in manufacturing and desperately needs more power to push economic plans forward.

One project that is going forward with the aid of a $259 million loan from the European Investment Bank (EIB) (Luxembourg) is the 750 MW natural gas-fired combined-cycle power plant in Deir-Ali, south of Damascus. The total cost of the project will be around $400 million. The power plant will house two 250-MW gas turbines and a 250-MW steam turbine. The project will take 30 months for construction.

Earlier this year, Ireland's ESB International (ESBI) (Dublin, Ireland) was awarded the contract to evaluate bids to build the plant. The European loan will go to the Public Establishment of Electricity for Generation and Transmission (PEEGT) (Damascus), which had issued an initial tender for the plant in November 2003 and, after experiencing weak response, reissued the tender again in March 2004.

The EIB loan is the third and largest made to Syria's power sector, following grants of $98 million and $150 million made in 2000 and 2001. One of EIB's motivations for making the loan was Syria's strategic decision to switch from oil-based to gas-based electricity generation. Small and medium sized businesses are also being encouraged with a $52 million line of credit from the EIB.

The decision to move from oil to gas was made in order to free oil supplies for export and to avoid becoming a net oil importer. A number of major power plants have already been converted from oil to gas-firing, including the Mahrada and Banias plants, which get their gas feed from the Palmyra fields. Other conversion plans in progress are at the Tishreen power plant, where the gas feed comes from the Omar treatment plant. The 300-MW gas-fired Nasriyeh plant is being converted to 450 MW capacity by adding three HRSGs and a 150 MW steam turbine. A $65 million loan from Kuwait has helped to move this $160 million project along.

The dilapidated Syrian power transmission network, which had been suffering losses estimated as high as 25% of total generated power capacity in the system, has been undergoing rehabilitation, helped by the $248 million loans made by EIB in 2000 and 2001. Funds for tackling the problems of poor quality wires and transformer stations have also come from Arab Gulf states and the Syrian government. The transmission project, due for completion in 2005, has covered the upgrading and expansion of sub-stations, overhead power lines, and underground cables.

Syria's progress to a secure power system cannot help but be affected by the larger security problems on its borders, of which Iraq looms the largest. Ambiguities in domestic political directions may gradually move into focus, as the country and its citizens become more empowered and experience the benefits of economic progress.

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