Saudi Arabia has an insatiable appetite for electricity, which has turned one local business into an international giant, as Jeff Daniels learns.
Although it has to be said that not all projects have yet received their financial green light, Saudi Arabia has an impressive programme of converting its oil dollars into other forms of essential infrastructure. Billions are being spent on water desalination plants and even more on ever increasing electricity capacity.
Across the country as a whole, it’s reported that investments in an additional 20,000 MW will have been made by 2020 at a cost of well over $100 billion, taking total electricity production to 70,000 MW—much of the increase said to be driven by air-conditioning!
The greatest single centre of activity is at the Saudi Electricity Company (SEC)’s giant Riyadh site, which by itself contributes 10,000 MW to SEC’s Central Operating Area of the national grid. So far the complex is up to Power Plant 9 and with PP10—currently under construction—output will be increased by a further 20 per cent when it is completed next year. But progress never stops and PP11 is already on the drawing board.
Construction of PP10, a large power plant complex with infrastructure for 5,000 MW, is in the hands of one of Saudi’s largest construction companies. Arabian Bemco Contracting was awarded the $3 billion engineering, procurement and construction (EPC) contract in June 2008; and by summer 2010, half the plant was already on line.
PP10 is a greenfield project initially based on the installation of 36 simple cycle, base loaded gas turbine generators operating—as are a large number of the generators at Riyadh—on treated crude oil. In addition to preparations for combined cycle conversion, there will also be provision for a further power generation increase during peak demands through turbine inlet air cooling of the combined cycle power blocks. Initially, however, the simple cycle gas turbines will run without turbine inlet air cooling for an unspecified period of time, to satisfy regional power demands.
Conditions are harsh at the PP10 site, with temperatures that can exceed 50 degrees Celsius or nudge zero. Dust storms can appear out of nowhere, reducing visibility to just a few metres. Desert spec ducting and silencers as well as air intake systems—with self-cleaning filter systems on the air intake systems—are in constant battle with the elements.
Bemco was established in 1965 and is certainly an international giant now. A combination of engineering skills and business acumen—the ability to juggle the many balls involved with complex projects—soon enabled the business to grow and from an early day, SEC was singled out as a client of choice.
Bemco is no stranger to mega-projects such as PP10. It has built a reputation as an EPC contractor capable of competing with the best in the world, particularly on power generation projects using various technologies including co-generation, combined cycle and steam power plants. Throughout this period of energy expansion, Bemco has been linked with some of the largest and most challenging turnkey projects in Saudi Arabia and has often taken its expertise into neighbouring countries.
Bemco has a current workforce of 18,000 people, with 90 per cent of them located in Saudi and the rest spread around neighbouring areas.
Bemco has something of a reputation for relatively short construction schedules and beating deadlines, as well as bidding attractively low. Henry Cabrera, executive director of Bemco, believes the company’s record of delivering fast track power projects on or before due is a key ingredient for its success as well as the control it has over the supply chain. “Bemco has a number of key specialised affiliates and subsidiaries,” explains Cabrera, “which enables us to maintain supply of vital equipments, materials and components, as well as subcontracts under our control.”
“Nor is there anything better,” says Emad Ghandourah, project development director, “than an over-skilled workforce. We put considerable effort into continual in-house staff training in order to remain an industry leader.”
Behind the scenes, Bemco has also invested heavily in software and IT systems, especially in enterprise resource planning (ERP) which Bemco finds indispensable for best scheduling and controlling its many capital assets. Unlike some organisations, which believe in hiring absolutely everything that is needed on a project, Bemco has gone the other way and put huge amounts of capital into human resources, fleets of construction equipment, and fabrication workshops which are crucial for carrying out operations. But with additional power generation projects showing no sign of slowing up, this expensive capital investment is likely to be put to good use for some time to come.
