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Presented at the Saudi Arabia: M ajor I nvestment O pportunities in the 21 st C entury 13-15 November, 2000 Madinat Ju

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Presented at the Saudi Arabia: M ajor I nvestment O pportunities in the 21 st C entury 13-15 November, 2000 Madinat Ju - PowerPoint PPT Presentation


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Power & Water Utility Company For Jubail and Yanbu (MARAFIQ). Dr. Akili Daifallah Khawaji Director for Marafiq Company Program Royal Commission for Jubail & Yanbu Kingdom of Saudi Arabia. Presented at the Saudi Arabia: M ajor I nvestment O pportunities in the 21 st C entury

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Presentation Transcript
slide1

Power & Water Utility Company

For Jubail and Yanbu

(MARAFIQ)

Dr. Akili Daifallah Khawaji

Director for Marafiq Company Program

Royal Commission for Jubail & Yanbu

Kingdom of Saudi Arabia

Presented at the

Saudi Arabia:

MajorInvestmentOpportunitiesin the21st Century

13-15 November, 2000

Madinat Jubail Al-Sinaiyah

slide2

CONTENTS

  • Royal Commission for Jubail & Yanbu at a Glance
  • MARAFIQ Company Program
  • Conclusions
slide3

Royal Commission for Jubail & Yanbu at a Glance

  • Background
  • Existing Utilities
  • Utility Demand Growth
slide4

Background

The Strategic Decision was Made by the Government of Saudi Arabia in the Early 70’s:

  • Stop Burning Associated Gas, Build Gas Collection System, and Transport Gas to Jubail and Yanbu (Done by Saudi Aramco).
  • Establish the Royal Commission to Plan, Construct and Operate Two Industrial Cities at Jubail and Yanbu.
  • Establish Saudi Basic Industry Company (SABIC) which will Invest in Building Petrochemical Industries in Both Cities.
slide5

East & West Pipeline

Jubail

Arabian

Yanbu

Gulf

Riyadh

Red

Sea

Jeddah

slide6

Jubail Industrial City (1016 Km2)

(Master Plan)

Airport Area

250 Km2

Residential Area

170 Km2

Industrial Area

130 Km2

Park Area

200 Km2

Arabian Gulf

slide8

Light

Industrial Park

Community

Heavy Industry

Heavy

Industrial Park

Light Industry

Infrastructure

Community Support

Port Facility

Conservation Area

Yanbu Industrial City (185 KM2)

(Master Plan)

Support Areas

Resedintial

Community

slide11

Scope of Services and

Gas/Utility/Petrochemical Relations

Scope of

Services

GAS

SUPPLY

ENERGY

INTENSIVE

HEAVY

INDUSTRIES

  • Electrical Power Supply (Yanbu)
  • Desalinated Water (Potable, Process)
  • Seawater Cooling
  • Sanitary & Industrial Waste Water Treatment

FUEL

FUEL

UTILITIES

PETRO-

CHEMICAL

INDUSTRIES

FEED STOCK

UTILITY

UTILITY

slide12

Existing Utilities

Production Facilities at Jubail and Yanbu Industrial Cities

desalinated water demand forecast
Desalinated Water Demand Forecast

Potable/Process Water (M3/Day)

YEAR

seawater demand forecast
Seawater Demand Forecast

Seawater Cooling (M3/Day)

YEAR

sanitary wastewater demand forecast
Sanitary Wastewater Demand Forecast

Sanitary Wastewater (M3/Day)

YEAR

industrial wastewater demand forecast
Industrial Wastewater Demand Forecast

Industrial Wastewater (M3/Day)

YEAR

slide18

MARAFIQ Company Program

  • Objectives
  • Legal & Commercial Structure
  • Key Elements in the Program
slide19

Objectives

  • Supply two Industrial Cities of Jubail & Yanbu with Reliable, Reasonably Priced Utility Services that Satisfy the Growing Needs in These Two Cities.
  • Arrange for a Private Commercial Basis without Imposing Additional Requirements on the Budget of the Royal Commission or Relying on Sovereign Guaranties.
  • Provide Investment Opportunities for the Saudi Business and Financial Institutions.
  • Provide Employment and Training Opportunities for Qualified Saudi Manpower.
slide21

Transitional Paths in Infrastructure Privatization

  • Political Cost of Adjustment/Regulatory Effort

HIGH

LOW

Publicly Owned Regulated

Monopoly

C

B

A

-

Unbundling &

Deregulation

Private Entry Allowed

Unbundling and

Privatization

Economic

Efficiency

of

Provision

No Unbundling

Divestiture Only

MARAFIQ

Divestiture

Unbundling/

Demonopolization

Divestiture of SOE

Competitive/Contestable Private

Infrastructure Provision

HIGH

slide22

Competition Versus Monopoly

Partial

Liberalization

Generation

Distribution

Transmission & Control

Customers

Open Access to Transmission System for Producers

Partial

Liberalization

Levy for

Transmission

Producers Connect to T/D System

Total

Liberalization

Levy for Trans. & Dist.

slide23

Steps for Privatization

3

2

1

Changing

Ownership to

Private Sector

Commercialization

Corporatization

Complete Privatization

Partial Privatization

slide24

Legal Structure of the MARAFIQ

Closed

Joint Stock

Company

Joint

Stock

Company

Limited

Liability

Company

Present

Status

Present

Status

slide25

Royal Commission

PIF

Saudi Aramco

SABIC

Other Industrial Users

Commercial Structure of the MARAFIQ

Saudi Aramco

SABIC

OIU

ECAs

USERS

Saudi

Institutions

Regional &

Int’l Banks

Royal Commission

Utility Service Agreements

Utility Concession & Lease Agmt

Loan Agreements

Construction

Contractor

MARAFIQ

Equity and Management Agreements

Turn-Key EPC Agreement

Subcontractors

& Suppliers

O&M Agreements

Supplier Agreements

Intertie Agreement

OTHERS

SEC

West

IPP

SWCC

ARAMCO

Direct Hire/

Contractors

SEC

West

slide26

Key Elements in the Program

  • A Saudi Joint Stock Company Called “Power & Water Utility Company for Jubail and Yanbu (MARAFIQ)” will be Established with a Capital of SR 2.5 Billion Invested by the Participant Partners (Royal Commission, Public Investment Fund, Saudi Aramco, SABIC and Other Saudi Private Investors).
  • MARAFIQ will be Responsible for Operation, Maintenance, Management, and Expansion of the Power, Water, Seawater, and Wastewater Utility Infrastructures in Industrial Cities of Jubail and Yanbu.
slide27

MARAFIQ will Lease the Existing Facilities which will be Owned by MARAFIQ at the End of the Lease Term.

  • MARAFIQ’s Services will be Provided to the Non-Industrial User at the Government Approved Rates, whereas its Services will be Provided to the Industrial Users at the Commercial Rates.
  • MARAFIQ Board of Directors will Act as an Independent Regulator during the First 3 Years.
  • The Board of Directors will Prepare the Details of the Independent Regulator and Get Approval from the Council of Ministers.
  • Since Users are Credit-Worthy, MARAFIQ will Be also Credit-Worthy.
slide28

The Kingdom has Favored the Company with the Privileges such as:

    • Legal Reserve = 4% instead of 10%
    • Maximum Reserve = 20% instead of 50%
  • It is Anticipated that the Company will Invest in New Projects and in the Expansion of the Existing Infrastructure Projects. The Cost will Range from SR 5 to 8 Billion during the First 5 Years of its Life.
  • The Royal Decree Approving the Basic By-Laws of the MARAFIQ Has Been Issued.
slide30

Conclusions

  • Additional Power & Water Production Plants are Needed to Meet the Utility Growth.
  • The MARAFIQ Program is Essential for Continued Industrial Growth in the Two Cities.
  • Combined Utility Production (Power, Desalination and Seawater Cooling System) will Result in a Minimum Cost/Unit of Production.
  • Phased Privatization Approach will Allow Maximum Gain with Minimum Impact on Users.
slide31

MARAFIQ will Allow Competition in Production of Electricity and Desalinated Water.

  • Users and Owners will Develop Hand by Hand the Well-being of MARAFIQ.
  • Cost of Service Approach Required will Establish Cost Data which will be Available after 3 Years of MARAFIQ Operation.
slide32

THANK YOU

www.royalcommission.com

E-Mail: marafiq@rc-ynb.com

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