In a region like the Middle East where water scarcity remains an important issue more often than not desalination is viewed as the only answer. The method provides a large share of the region’s fresh water requirements, ranging from 27% in Oman to as much as 87% in Qatar. But it also accounts for a substantial share of total energy consumption, or almost one third in countries like the UAE.
With highly energy-intensive industries such as refining, petrochemicals and fertilizers, the industrial sector is the dominant user of energy in the GCC, accounting for half of total energy use. As rapid industrial development in the region continues and with populations on the rise, demand for energy and water is expected to increase dramatically. This projection is gradually changing the way industries manage their water.
Thierry Froment, Chief Operating Officer (COO) of Veolia Water Technologies for the Middle East, who has spent 30 years in the water treatment business, ten of which were in oil and gas, says perception have changed significantly, with desalination no longer the only option. “Water was very much seen as a utility and as such, the clients would not necessarily consider recruiting water treatment specialists to execute a contract. There has been a change in that particularly linked to the increase in the level of reused water. We moved from just treating the water and discharging it into the environment to treating the water to reuse it in the processes of the refinery. Then the water becomes critical to the operation of the refinery or the petrochemical complex because if there is any problem in the design or the operation of the plant the refinery lacks fresh water and the whole thing stops,” Froment explains.
According to the Arab Water Council, 40% of water in the MENA region is reused after treatment, 8% is treated and discharged and over 50% is discharged without any treatment. This is somewhat surprising since wastewater reuse is usually considered as ‘the more economical’ option compared to desalination especially when energy consumption is taken into account. Project costs can be up to 80% cheaper than desalination mainly associated with the reduced energy requirement, while cost estimates for treated waste water can be up to four times cheaper than its desalinated counterpart.
“The Middle East is one of the regions where water is most scarce so certainly it is the ideal place to go for reuse,” says Froment.
“When you think that most of the water which costs a lot of money to desalinate in the first place goes back into the sea, I think there is a lot of room for improvement and certainly that is one of the drivers for our presence here in the Middle East.”
So why aren’t companies investing more in reuse as opposed to desalination? According to Froment, it is a combination of factors chief amongst which is a lack of understanding of what he calls ‘the true cost of water.’ To help producers overcome this challenge, Veolia has designed a tool which takes into account every individual cost factor, giving a more accurate estimate of what water production really costs.
“It takes into account things like license to operate; the risks involved should the water not be the right quality to feed the plant or be discharged; the evolution of discharge regulations; the scarcity of water; increased competition for fresh water between industries, etc. All these parameters specific to each industry are taken into consideration to re-quantify the true cost of water, and when you get the big picture reuse makes much more sense.”
“There is no revolution in what we are doing,” says Froment. But the facts would beg to differ. According to some statistics, an average large scale refinery needs more than $100,000 per day for its total water related expenditures. This takes into account both supply and discharge cost. Reusing process and waste water would not only dramatically reduce this amount, it would allow for more efficient energy use within the refinery and cut on huge desalination costs.
However, certain perception gaps within the industry pose as a significant challenge to water treatment infrastructure and technology investment. Saudi Arabia and the UAE have sought to overcome this by offering different tariff structures for those consumers that utilise reused water. In Saudi, this measure is specifically targeted at the industrial sector, with plans to raise the amount of reused water annually from 0.4bn cubic meters (cu m) currently to 1.6bn cu m by 2020.
Saudi Arabia is an important market for Veolia which in recent years has invested significantly in a number of projects in the Kingdom. Froment told RPME the company is currently working with subsidiaries of SABIC to improve the water treatment systems and operations at some of its sites. SABIC recently set a target to reduce water use intensity by 25% between 2010 and 2025. But compared to other parts of the region, the Saudi market is more difficult to break into as most waste water within the Kingdom is managed by a dedicated local utility provider.
“You have different parties that can influence the game. We don’t want to take the work of Marafiq so we need to find if there is a way to combine the interests of Marafiq and in this case Sabic to fund the optimum plant,” says Froment.
For the 58-year old COO, brownfield projects seem to be a more realistic target especially as companies face growing pressure to make their operations more sustainable and reduce their environmental footprint.
“In the petrochemical and refining sector the new market that we want to address is that of brownfield projects where in direct [cooperation] with the client we can offer an improved water treatment system.”
As part of its unique business model, Veolia would design, build, operate and even invest in the plant. Once the facility is up and running, it would generate a profit by selling the reused water.
“In the world Veolia Water Technology is certainly the company that covers the widest range of water treatment and we are very keen to use these little bricks of technologies to then integrate them together to treat the water to whatever quality is required. I believe we can say that whatever the quality of the waste water, we can produce whatever quality of process water, so technically it is not a problem,” Forment explained.
The model appears to be a good proposition as it is beginning to draw the attention of operators, who are starting to realise the benefits of treating the process water as opposed to discharging it into the environment.
“When it comes to wastewater operations on brownfield projects we can see that people are becoming interested. At the same time, there are more fluctuations in the waste water quality so people understand that operating a waste water treatment plant is more difficult than operating a desalination plant.”
One key factor which stands in the way of investment is current low oil prices. With less cash to spend and mounting pressure to keep expenses to a minimum, there is growing reluctance to commit to new projects.
“The situation today – particularly in upstream oil and gas – is not as rosy for water treatment suppliers as it was two or three years ago when oil was at $100 a barrel,” admits Froment.
“For example, I can see that there is pressure to delay the deadline in Qatar for the prevention of discharge of effluent at sea. I can see this kind of movement because the industry is suffering from the current prices and the authorities do not want to create an additional burden in these difficult times.”
This trend is not exclusive to one country and prevails throughout the Middle East. Projects on Saudi Arabian soil have been stalling for more than a year, while the governments in Qatar and Kuwait have had to repeatedly delay – and in some cases call off altogether – new greenfield investments.
Froment commented: “There are significant issues in the Middle East in terms of cash. We struggle in certain countries, particularly in Saudi these days, to be paid by our clients on time. And if you start with bad payment conditions and you have customers that are not paying you on time you have to at some point say – ‘we don’t bid’.”
Imagine his predicament when he is the man in charge with leading the business into new markets, making it more competitive, and all of this while maintaining a profit.
But Froment remains optimistic. As with many businesses based out in the region, Saudi Vision 2030 is a big source of hope.
“We see [it] as very positive. I don’t know if the forecasted schedule of implementation will be achieved but certainly for us that’s a step in the right direction and we want to be part of it,” he said.
The reality is the Middle East is an extremely water stressed region and it needs to better utilise its fast depleting resources. The sooner it wakes up to the harsh reality, the further it can set the clock back. As for Veolia, it will always be around to offer its support when the time is right.
