Market Brief for Egypt
The demand for electrical power in Egypt is expected to increase 5%-6% annually. Over the past year alone, peak demand has grown by almost 1,000 MW to reach 13,326 MW. Project activity in the past two years has focused on the installation of an additional 16,648 MW in new generating capacity (to be completed over the next few years).
The Government recognizes that electric power is crucial to economic activity and growth and that it is an essential element in the overall quality of life of Egypt’s people. Today, electricity reaches 98% of all residences in Egypt and electricity supply is available for investors even in poor, developing areas.
The Egyptian Electricity Holding Company is a joint stock company, which owns the seven electricity companies responsible for the regional generation and distribution of electric power. The production function is separated from the transmission and distribution functions. There are now four thermal and one hydroelectric power generation companies; seven electricity distribution companies and one transmission and dispatch company.
Current plans considers that generation, transmission, and distribution companies will eventually be privatized, while the Egyptian Electric Holding Company (EEHC) will continue to hold the company responsible for the transmission of power. New power generation will come almost exclusively from privately funded projects, which will sell to EEHC.
Best Sales Prospects:
The U.S. electrical power equipment industry can find the best opportunities in the sales of:
- Turbine generator units with associated equipment
- Vibration dampers, circuit breakers more than 66kv
- Power transmission lines
- Insulated wires and cables for more than 220 kV, PVC insulated high voltage cables.
- Power transformers more than 25MVA-66kv. Distribution transformers more than 2MVA-33kV.
- Rectifiers and rectifying apparatus, switch
- Isolators and breakers, fire extinguisher of capacity more than 25/500kg.
For more information, please contact Commercial Specialist Venice Kostandy, U.S. Embassy Cairo; Venice.Kostandy@mail.doc.gov
Market Brief for Israel
Electricity Sector Israel is a promising market for U.S. suppliers of electrical generating, distribution and transmission equipment. According to recent forecasts by the Israel Electric Corporation (IEC) and the Ministry of National Infrastructure (MNI), in the coming years electricity consumption in Israel will increase by 4.5-5% annually.
Israel Electric Corporation (IEC), Israel’s only electricity utility, plans to invest $1.2-$1.3 billion annually over the next seven years on the expansion of its generating system and the upgrade of its transmission and distribution equipment. Current installed capacity is 9,733MW. To meet rapidly growing demand, IEC plans to increase production capacity to 15,000 MW by 2010.
To capitalize on the recently discovered off-shore gas finds, IEC is in the process of adding 7 combined cycle gas turbines to the network, partially by converting oil and diesel-fired generators to natural gas and partially by building new stations, in order to boost its generating capacity by 1,750MW. IEC also plans to build a $1.2 billion coal-driven power station (project D) in Ashkelon with two 600MW generators, and has begun the tender processes for the major equipment. Project D will be equipped with flue gas de-sulphurization and combustion systems.
IEC also plans to spend about $1 billion over the next ten years to help reduce emissions from its power plants. Furthermore, an Israeli consortium has received GOI authorization to build a $250 million 450MW Independent Power Producer (IPP). Especially with the current exchange rate, there are good opportunities for U.S. equipment suppliers competing with EU-based manufacturers.
Natural Gas Offshore natural gas finds discovered during the past three years are currently under development, and have given impetus to the plans to develop a supply network. Israel is working to develop a $400 million natural gas transmission system to supply gas to major local industries.
The Israeli government signed a contract in 2002 with a domestic supplier, which partnered with an American firm to supply 1.7 BCM natural gas annually. Regional political issues and internal bureaucratic complexities have slowed the progress on negotiations with potential second and third suppliers, from Egypt or offshore Gaza, and on the construction of an overland transmission system. However, this year, a U.S. firm has began to lay a pipeline from an offshore gas rig to the coast and tendering is in process for the construction of a 100 km underwater pipeline along the Mediterranean shore.
For more information, please contact Commercial Specialist Irit Van der Veur, U.S. Embassy Tel Aviv; irit.vanderveur@mail.doc.gov
Market Brief for Jordan
The energy sector in Jordan is one of the most promising sectors for U.S. exporters and investors, with several important opportunities opening up in 2004. Expected investment required to meet demand for primary energy, oil products and electricity, over the next five years is estimated by the Jordanian government at about US$1.6 billion, with the largest portions going towards the oil refinery upgrade and expansion, power generation, natural gas pipeline and power transmission.
Oil Refining: Jordan’s one refinery, the Jordan Petroleum Refinery Co.(JoPetrol), is long overdue for a complete upgrade and expansion. The firm expects to open a tender for the approximately $600 million project sometime in 2004. This project represents one of the largest and best opportunities for U.S. firms in both the engineering services sector as well as suppliers of the full range of refinery equipment and services. With JoPetrol’s monopoly concession on refined products due to expire in 2008, this project is a priority for the company and the government.
Electricity: The electricity sector in Jordan is in the process of being privatized. It was unbundled into three elements of generation (partial privatization), transmission (government) and distribution (3 private and 1 government) in 1999. Privatization opportunities are outlined below:
CEGCO: a 1.636 MW generating company is currently owned 100% by the government, with privatization anticipated for 51%.
EDCO: a distribution and supply company serving south and west of Jordan, is currently owned 100% by the Jordanian government, with privatization anticipated at 100%
IDECO: a distribution and supply company currently owned 55.4% by the Jordanian government, of which the government intends to sell its entire stake.
The long-term electricity demand (Energy and load) forecast shows high growth rates of about a steady annual growth of 5%, on average for the coming ten years. The shares of the different countries in meeting the power sector demands for machinery and equipment vary from year to year. This is dependent on tenders and the “lumpiness” of investments. The introduction of natural gas piped in from Egypt, the initial phase of which came on-line in 2003, will introduce new investment opportunities in the reform of Jordan’s antiquated power stations. Best sales prospects include: distribution transformers, insulators, overhead conductors switchboards, underground cables and gas turbines, engineering and consulting services.
The following electricity resources are either in the pipeline, ongoing or under construction within the next five years:
- The second phase of the $ 230 million gas pipeline project between the city of Arish in Egypt and Aqaba as the first station in a long line planned to reach Syria, Lebanon, Cyprus, Turkey and South Europe entails the construction of installing a 370 km gas line extending from Aqaba northbound to Rihab electricity generation plant in the north, and the Khirbet Samra and Al Hussein Thermal Station in the Zarqa area.
- Independent power producer (IPP) at Kherbat Al-Samra which will have a capacity of 450MW. The Plant is to be built to export 300 Mw of power.
- A new 100MW gas turbine to be converted with an existing unit at Rehab Power Station to a combined cycle.
- Three sets of 25-30MW wind power projects at three different sites in Jordan.
- An oil shale power project of 300MW capacity in the southern part of Jordan.
- Upgrading Rehab power substation to combined cycle burning natural gas instead of diesel.
- Supply and Installation of Gas Turbine for Risha Gas Power Station
- Supply and Installation of 132KV underground cables (Turnkey project) between existing substations Tareq and Bayader 132/33KV substations and Amman South and Abdoun 132/33 KV substations.
- Supplying liquefied gas to homes and businesses through pipes instead of the present system of gas cylinders
For more information, please contact the U.S. Commercial Service in Amman, Commercial Specialist Muna Farkouh, muna.farkouh@mail.doc.gov .
Market Brief for Lebanon
Lebanon has approximately 2,200 MW of nominal generating capacity, while actual production varies between 1,200 and 1,600 MW. This includes 375 MW additional power as the second gas turbine at Beddaoui power plant (north Lebanon) becomes operational and the steam units at Beddaoui and Zahrani (south Lebanon) stations operate at full capacity. Current demand is about 1,600 MW, and power shortages at peak times are still common. Lebanon's electricity public utility, Electricité du Liban (EDL), faces major challenges: illegal connections to the grid; meter tampering; technical (15 percent) and non-technical (32 percent) losses totaling 47 percent of production; and completion of a 220 KV transmission network. EDL plans to increase power production to 2,700 MW by end 2006 in order to meet increasing demand. Electricity demand is expected to increase yearly by 4 to 6 percent. The government has expressed interest in renewable energy resources, as well as converting power plants from fuel oil and diesel oil to natural gas, due to their economic and environmental advantages. The Ministry of Energy and Water (MEW) is considering a project to construct a LNG terminal and pipeline to supply alternative fuel sources for power generation plants and some local industries. The U.S. TDA has given MEW a grant of $500,000 to hire a U.S. engineering firm to prepare a feasibility study for the LNG supply project. The MEW has recently signed a contract with a Ukrainian company for the construction of a natural gas pipeline from the Syrian-Lebanese border to the Tripoli Oil Installations (north Lebanon), and thereafter to the Beddaoui power plant. Construction is expected to be completed in April 2004. The MEW has also called for an international tender for consultancy services for the construction of a natural gas pipeline from Tripoli Oil Installations to the Zahrani combined cycle power plant (in south Lebanon) along the coast. Lebanon, Syria, Egypt and Jordan have agreed to construct a USD one billion pipeline for the transit of Egyptian and Syrian natural gas; construction of the line between Egypt and Jordan was completed in June 2003. Lebanon is expected to start benefiting from this project by the year 2005.
MEW is determined to privatize power production and distribution. The GOL plans to sell 40 percent equity share of production and distribution at EDL, and to retain power transmission; however, it may award the management of the transmission component to the private sector. On December 19, 2001, The Higher Council for Privatization (HCP) mandated investment bank BNP/Paribas to find a strategic partner for the sale of EDL power production and distribution. In the meantime, EDL is trying to improve its dramatic financial situation. However, the improvement in EDL finances, resulting from improved bill collection, in the first half of 2003 was eroded by the rise in the international price of oil derivatives. Currently, the Council for Development and Reconstruction (CDR) is preparing an international tender for the construction of the Electric Network Control Center (NCC). The CDR is presenting evaluating proposals for engineering services. The project will be financed by the Arab Fund for Economic and Social Development. Lebanon plans to join the regional inter-connection network linking Egypt, Iraq, Jordan, Turkey and Syria; a first step to connect to the Syrian network (construction of a 400 KV line and a 400/220 KV substation in Ksara in the Biqa’) should be completed by the end of 2003.
For more information, please contact Commercial Specialist Naaman Tayyar, U.S. Embassy Beirut; Naaman.Tayyar@mail.doc.gov
Market Brief for Turkey
Turkey has an annual energy market over USD 2.5 billion dollars for the new projects. Turkey is liberalizing the electricity market. Energy Market Regulatory Agency (EMRA) issues licenses for those private sector investors, which would like to establish power plants as an independent power producer or autoproducer.
As the market is pretty much saturated, majority of the opportunities exist in supplying turbines and generators required for small size thermal (mostly gas-fired) and hydropower plants. Wind power plant projects may receive further incentives as part of Turkey's preparations for accession to the European Union. EMRA has license fee holidays for the renewable energy investors.
EMRA has received license applications from the private sector for the implementation of over 120 wind power projects at the total capacity of 4200 MW, over 40 hydropower projects at the total capacity of 1100 MW and over 50 thermal power plant projects at the total capacity of 1900 MW. EMRA has also received applications for four wholesale licenses and three-retail licenses.
Other opportunities exist in the privatization of existing electricity distribution grids, privatization and upgrading of existing power plants, supply and installation of power transformers and gas insulated substations for power transmission lines and SCADA systems for the electricity distribution lines.
As part of the liberalization process in the natural gas market, Energy Market Regulatory Agency (EMRA) has received 8 CNG, 9 NG import, 6 NG distribution, 3 wholesale, 3 storage and one transmission license applications from the private sector as of February 28, 2003. Turkey has signed long term take or pay NG procurement contracts with Russia, Iran, Azerbaijan, Turkmenistan, Algeria (LNG) and Nigeria (LNG).
Turkey imported NG and LNG from Russia, Iran, Algeria and Nigeria in the total amount of 17 billion cubic meters in 2002. A new natural gas pipeline is being planned between Turkey and Azerbaijan. Turkey is at the crossroads and will be very important in selling the Azerbaijani and Iraqi gas to Europe, which is looking for alternatives to the Russian gas.
EMRA announces license tenders for the natural gas distribution at its web site http://www.emra.gov.tr. EMRA will announce such tenders one by one for over 50 cities in Turkey. U.S. companies can be investors together with Turkish companies and municipalities in these projects. Turkish companies are also seeking for U.S. partners, which have operational experience of such NG distribution lines.
Turkish Government will privatize the existing natural gas distribution networks in Eskisehir, Bursa, Ankara, Istanbul and Kocaeli. Turkish Government will also transfer its existing long-term contracts it has with the above mentioned countries to the private sector in 10 years time. Companies will be able to import or export into or from the Turkish market by obtaining a license.
For more information, please contact Senior Commercial Specialist Serdar Cetinkaya, U.S. Embassy Ankara, Turkey; Serdar.Cetinkaya@mail.doc.gov
Market Brief for West Bank & Gaza
Over the next few years, infrastructure development, including upgrading the electricity network, will be a major growth sector of the Palestinian economy. The current electricity systems require substantial upgrading and expansion to meet current demand. Out of the 3.6 million Palestinians living in the West Bank and Gaza, 50,000 have no access to electricity and 210,000 receive partial services through diesel generators. Insufficient power supply is a serious impediment to the growth of the Palestinian economy. This sector will offer opportunities to U.S. companies, both in major network equipment as well as in diesel generators.
Three electricity companies operate in the West Bank and Gaza: the Jerusalem District Electric Company (JDECO) that serves Jerusalem, Jericho, Ramallah and Bethlehem; the National Electric Company (NEC) operating in the northern West Bank; and the Gaza-based Palestine Electric Company (PEC). The JDECO and the NEC purchase electricity from the Israel Electric Corporation (IEC), which they transmit over a grid that is currently owned by IEC. The IEC supplies 95% of the electric power used in the West Bank, the remaining 5% is provided by decentralized small diesel generators. The PEC operates a power station, which currently generates 92MW covering 45% of the demand in Gaza. The power station is expected to supply Gaza with 140 MW of electric power by mid-March 2004.
The West Bank and Gaza, like other developing countries, depend on oil as the main source of energy. Palestinians import all their petroleum products from Israel. Prices are high due to heavy taxation. Several years ago, natural gas was discovered off the Gazan coast. British Gas holds a license to explore the gas fields and the company has been involved in negotiations to secure a supply agreement with Israel, the main potential customer for the gas. Once an agreement is reached and the infrastructure to transport the gas is developed, the Gaza power station will begin to operate on natural gas. Future demand for gas is estimated at 1.1 BCM/pa.
For more information, please contact Commercial Specialist Assad Barsoum, U.S. Embassy West Bank and Gaza; Assad.Barsoum@mail.doc.gov