Siemens Energy Wins $796 Million in Orders for Qatar Water and Power Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--Siemens Energy (Erlangen, Germany), part of electrical and electronic equipment major Siemens AG (NYSE:SI) (Munich, Germany), has announced that it has gained additional orders from Qatar Electricity Corporation Q.S.C. (DOH:QEWS) (Kahramaa) (Doha, Qatar), as part of a national project designed to expand the power distribution network in the state.

Qatar has increased its standard of living over the past few decades, which has resulted in a corresponding increase in power demands over the period. Large-scale developments are under way throughout the state, particularly in the industrial sector. New power generating projects at Ras Girtas and Mesaieed are scheduled to come online early next year. The 2,742-megwatt (MW) plant at Ras Girtas will be the second-largest integrated water and electricity plant in the Middle East.

To distribute power to the required areas efficiently, the state has embarked on a major program to develop a power distribution network known as the Qatar Power Transmission System Expansion. Siemens has been heavily involved in the project with Kahramaa.

Over the past five years, Siemens has installed about 1,400 kilometers of high-voltage cable and more than 70 switchgears for the project. The company has won contracts worth more than $2.1 billion for the project, with the most recent being a $928 million order in 2006 from Kahramaa for Phase VII construction.

The current order, for Phase IX of the expansion project, is worth a total of $796 million, split between $676 million for substations and switchgear, and $120 million for associated cables.

Under the current contract, Siemens will supply 15 turnkey substations, operating at various voltage levels, ranging from 400 kilovolts to 11 kilovolts. The 15 substations will be located across the state, including Dohar, Dukhan and Mesaieed. One of these, operating at 400 kilovolts, will be used to connect the Qatar national power network to the Gulf Cooperation Council (GCC) grid, the first phase of which is already in operation, linking Kuwait, Saudi Arabia and Bahrain to Qatar.

Included in the substations section of the contract, Siemens will also supply transformers and control and protection equipment. The company will also work on extending and modifying existing substations. Under the second part of the deal, Siemens will also supply insulated switchgear, online power condition monitoring and protection equipment.

In addition to Siemens, contracts were also awarded to the Hyosung Corporation (SEO:004800) (Seoul, South Korea), continuing the recent trend of Korean companies winning contracts in the Middle East region. Japan's Mitsubishi Corporation (TYO:8058) (Tokyo), together with the Indian branch of Siemens, Siemens Limited (BSE:500550) (Mumbai), were awarded a contract to lay underground cabling, while a contract to install overhead cabling was awarded to the Saudi Cable Company (SAU:2110) (Jeddah, Saudi Arabia).

As part of the overall expansion program, Areva SA (EPA:CEI) (Paris, France) was also contracted to supply and install a telecoms package. All the projects are expected to be completed within the next 40 months.

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