Complex Made Simple

Shamal Azzour Al-Oula celebrates crossing of major production and construction mile

For Azzour North One electricity and water plan.

Shamal Azzour Al-Oula KSC celebrated the on-schedule crossing of the 664.2 megawatt power production milestone, representing 40% of total power output, by its Azzour North One power and water desalination plant.

The plant is Kuwait’s first independently owned plant established under Kuwait’s Public Private Partnerships (PPP) law of 2008.

Azzour North One power and water plant is the first gas-fired combined cycle power and water desalination plant in Kuwait, and will have a capacity exceeding 1,500 megawatts (MW) of electricity and 107 million imperial gallons of water per day (MIGD) once completed by the fourth quarter of 2016. This represents 10% of Kuwait’s power capacity and 20% of Kuwait’s water capacity.

The ceremony was attended by HE Minister of State for Cabinet Affairs and Minister of Electricity and Water Sheikh Mohammad Al Sabah and President of Kuwait Authority for Partnership Projects Mr. Adel Al Roumi. The ceremony was also attended by Shamal Azzour Al-Oula partners and primary contractors.

Shamal Azzour Al-Oula Chairman Mr. Yousef Al Hajri said, “We are very proud to announce the crossing of this major milestone today and we are on schedule to operate at 100% capacity by the last quarter of next year. The ongoing achievements of the project is a testament to the success of the various government and private partnerships that this company was founded on.”

Shamal Azzour Al-Oula CEO Andrew Biffen said, “This milestone is the direct result of the great work and cooperation by everyone working at Azzour North plant, our government and private shareholders, and our construction partners Hyundai Heavy Industries (HHI) and Societe Internationale De Dessalement (SIDEM) Sidem, for without them today’s announcement wouldn’t have been possible. I would like to thank everyone who had a role in bringing us to cross the 50% power production milestone on schedule and we look forward to announcing the 100% power production milestone by this time next year.”

Shamal Azzour Al-Oula is 40% owned by a private consortium comprising ENGIE (formerly GDF SUEZ), Sumitomo Corporation, and A.H. Al Sagar & Brothers. The remaining 60%, owned by the Government of Kuwait, through the Kuwait Investment Authority (KIA: 5%), the Public Institution for Social Security (PIFSS: 5%) and Kuwait Authority for Partnership Projects (KAPP: 50%). The Government of Kuwait is mandated to sell 50% of the total ownership through an Initial Public Offering (IPO) to Kuwaiti citizens after construction is completed. The government will retain 10% stake following the IPO.

The plant aims to meet Kuwait’s plan to significantly increase capacity over the coming years, in a larger effort to meet an anticipated peak demand of 25 gigawatts (GW) by 2025. The treated water and the power produced from the plant will be entirely supplied to the country’s national power and water grid operated by the Kuwait Ministry of Electricity and Water (MEW) under a 40-year long-term Energy Conversion and Water Purchase Agreement (ECWPA). ENGIE and Sumitomo will undertake the operation and maintenance (O&M) of the plant on an equal share basis.

Project Achievements:
● Cumulative Man Hours: over 22 Million
● Project has maintained between 6% and 7% progress ahead of schedule
● Environmental incidents: 0
● Early power generated after 18.5 months since start of development
● Project is developing within budget

Project Facts:
● Total construction cost: US$1.4 billion
● Power plant: engineering, procurement and construction (EPC) contractor: Hyundai Heavy Industries (HHI)
● Water plant: engineering, procurement and construction (EPC) contractor: Societe Internationale De Dessalement (SIDEM), a subsidiary of Veolia, France

Technical Facts:
● The power plant will produce 1539.2 MW in net contracted power capacity once completed in fourth quarter of 2016.
● The power plant is operated by a combined cycle gas turbine: natural gas as main fuel and gas oil as backup fuel.
● The power plant comprises 5 General Electric GTG 9F-3 turbines generating 225.8 MW each and 2 General Electric STG D1 turbines generating 251 MW each
● The water desalination plant will comprise a multiple-effect distillation (MED) unit capable of producing 107 million imperial gallons per day (MIGD) (the equivalent of 486,400 m3/d) of desalinated water. The water desalination plant’s output will represent 20% of Kuwait’s installed water treatment capacity.
● The water plant will use MED technology through 10 SIDEM MED units, each generating 10.84 MIGD.

Azzour North One power and water plant was awarded under the IWPP law and implemented through a process managed by the Kuwait Authority for Partnership Projects. The Plant forms part of an overall IWPP located in the Azzour area. The overall IWPP is expected to be developed over five phases, for a total capacity of 4,800 MW of electricity and approximately 280 MIGD of desalinated water to be tendered over a period of four to six years to meet a projected rapid increase in electricity demand, which is expected to increase at a high rate of 7.6% per annum until 2020 against the backdrop of fast economic growth.

Azzour North One Project Timeline:
● March 2011: Request for proposal (RFP) issued for the Az-Zour North One Plant development
● March 2012: Preferred bidder was chosen
● December 2012: Successful bidder announced
● December 12, 2013: Kuwait’s rst RFP process was successfully completed Signing ceremony with MEW and construction started
● January 10, 2014: Kuwait’s rst RFP process was successfully completed Signing ceremony with MEW and construction started
● January 10, 2014: Shamal Azzour Al-Oula reaches its nancial close
● March 13, 2015: Key interfaces connection with MEW and KOC: Electricity transmission facilities (MEW), Main fuel connection – Gas (KOC), Backup fuel connection – fuel oil (KOC)
● Main fuel connection (KOC)
● Backup fuel connection (KOC)
● May 3, 2015: First megawatt of power was generated into the national grid of Kuwait
● June 28, 2015: ECOD 1 :1 GTG in SC – 214.3 MW
● August 11, 2015: ECOD 2 :2 GTGs in SC – 440.5 MW (achieved two days early)
● September 18, 2015: ECOD 3 :3 GTGs in SC – 664.2 MW (achieved ten days early)

Upcoming milestones
● March 27, 2016: Scheduled shutdown of early operating units in preparation for full production.
● August 26, 2016: First desalinated water to be delivered to MEW from MED
● November 26, 2016: PCOD (5 GTG’s, 2 STG’s, 10 MED’s) 1539.2 MW and 107 MIGD net output commences