The SEC Power Forum Eng. Salah Bahobail Session II: Economic Impact of expanding the Local Power Capabilities Eng. Salah Bahobail Director, Economic Planning Department Royal Commission for Yunbu

Royal Commission for Jubail and Yanbu Royal Commission At Yanbu Nationalizing industries related to water desalination and major Saudi industries Initiative SEC Power Forum - Riyadh, May 11,2013

Contents Global Facts & Figures Kingdom Facts & Figures Investment Opportunities Nationalization Initiative. “Desalination and Major industries Park at Yanbu Industrial City”.

Global Desalination Facts & Figures The demand for desalination capacity globally is projected to double by 2016. Saudi Arabia is the #1 in desalination capacity in the world. 15,988 plants in operation in the world 244 plants under construction 2011 = 66.5 million cubic meters per day 2016 = 132 million cubic meters per day Desalination Capacity Saudi Arabia USA UAE Spain Kuwait China Japan Qatar Algeria Australia Source: IDA 2010.

Desalination Investment 2010 - 2016 The global desalination industry requires SR 393billion ($105 b) in capital investment from 2010 to 2016. 50 - 60% (~$57.5 billion) of this investment will be directed toward the MENA region. The Kingdom represents 18% of the world’s desalinated production. SWCC plans to invest SR133 b. ($35 billion) in next decade. المصدر: IDA 2010

Global Desalination Facts & Figures There are 115 countries that have plants to desalinate water. SWCC capital investment in 2012 is SR15.5b ($4.1 billion). Yanbu- Medinah plant under construction cost is $1.05 billion.

Kingdom Desalination Facts & Figures A total of 50% of all drinking water in the Kingdom comes from desalination. The Kingdom has the world’s highest water consumption per capita – more than 250 liters per person per day. Water demand is rising at the rate of 7% per year. The Kingdom has more than 35 desalination plants located in 16 cities. The amount of energy used for desalination is more than 50% of the total production cost. Many of the Kingdom’s water plants built in the 1970’s are nearing the end of their useful work life Source: The Oil & Gas Year Saudi Arabia 2012; SWCC.

Desalination Industry Requirements There are 7 major products, services and suppliers required to support the desalination industry. Desalination Industry 1. Chemicals 2. Component Manufacturers 3. Tubing & Pipes 4. Membranes & Pressure Valves 5. Instruments & Control Systems 6. Treatment System Suppliers 7. Water Storage Tanks

Spare part market in Kingdom Some studies estimate that the size of the market for specialized materials and spare parts for desalination and major companies in kingdom exceed SR 200 billion annually.

Investment Opportunities in SWECC Saudi Arabia is among the top countries with the appropriate environment for investment where all key factors for investment are as follows: 1 – Governmental support. 2 - Financial support. 3 – Strategic location. 4 – Available workforce.

Investment Opportunities Mechanical Electrical Chemical

Mechanical Opportunities Mechanical opportunities represent the largest share of other opportunities because of the nature of the production equipment of water and electricity. Mechanical opportunities include the following: 1 - pumps and parts. 2 - valves and parts.

Mechanical Opportunities

Investment Opportunities Mechanical Electrical Chemical

Electrical Investment Opportunities Electrical opportunities include the following: 1- Oil and dry transformers. 2- Electric motors. 3- Switchgear.

Electrical Opportunities

Investment Opportunities Mechanical Electrical Chemical

Chemical Investment Opportunities Used for a number of chemical products in the various plants and numbering about 64 products and most of them are imported from outside the Kingdom. The annual consumption of chemicals SR 133, 646, 306

The annual consumption rate of the most consumed chemicals (tons / year) by SWCC only

The annual consumption rate of the most consumed chemicals (tons / year) by SWCC only

Cost of spare parts and chemicals for the year 2012 (in millions of SR) by SWCC only

Nationalization Initiative Partners Saline water conversion corporation Saudi Electricity company Ministry of Water & Electricity Power and water utility company for J&Y (MRAFIQ) SABIC Saudi Arabian Mining Company Saudi Aramco Industrial cluster Ministry of petroleum & minerals Royal commission for yanbu

Nationalization Initiative The Initiative is based on: Strategic procurement concept. Actual Market data. Actual growth data. Nationalization Incentives.

Nationalization Initiative The partners have prepared a program to collect and list economically viable for industrialization spare parts. Identified five groups for common template : Pumps valves Motors Gauges Bearing An economic feasibility studies will select the top 100 industries as first phase to be nationalized in Yanbu Industrial City.

RC-Yanbu Desalination Park RC-Yanbu has set aside a prime industrial area to support “ the desalination Park”.

RC-Yanbu Desalination Park Several of Yanbu’s existing industries are positioned to contribute to the desalination industry. Chemicals: Cristal Prime Basic Chemicals Jalal A-Sayed Factory Mechema Chemicals International Nalco Saudi Company Tubing, Pipes & Metal Processing: Saudi Hepco Al-Altoun Factory for Steel Yanbu Steel Co. Al-Yusr, Townsend & Bottum Saudi Belleli Heavy Industry Ltd. Olayan Descon Industrial Co. Shairco Fiber Glass Tarik Alzahid Aluminum Saudi Superlit Co. Valves: Saudi Fal Company Ltd. Youssef Zahran Engineering Desalination Industry Chemicals Component Manufacturers Tubing & Pipes Membranes & Valves Instruments & Control Systems Treatment System Suppliers Water Storage Tanks Potential Opportunities include: Components Manufacturers Instruments & Control Systems Treatment System Suppliers Membrane manufacturers Water storage tanks

Nationalization Incentives RC-Yanbu Offers the option to provide ”Plug & Play” sites.

Royal Commission for Jubail and Yanbu Royal Commission At Yanbu Thank You! Thank You WWW.rcjy.gov.sa