SAWEA 2006-06-07
PRIVATIZATION AND OUTSOURCING OFWATER AND WASTEWATER FACILITIESPRIVATIZATION AND OUTSOURCING OFWATER AND WASTEWATER FACILITIES
SAWEA 2006-06-07
SpeakersSpeakers
The Veolia Water Team► Frederic FLEURY► Didier BIGEONNEAU► Dion TENHORN
SAWEA 2006-06-07
Overview PresentationOverview Presentation
► Who we are (company, activity . . .)
► General Data, Challenge, Solutions & Developments
► Possible partnership models . . .
► Common questions . . .
► Our approach . . .
► Our partnerships & experience . . .
► Our case studies . . .
Technical Solutions
Operating Services
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Operation and maintenance(wastewater facilities, water facilities, ground water remediation)Design/build, upgrade(new water and wastewater facilities, upgrade of existing facilities)Water recycle, re-use, & water use reduction
Freight Transportation & Logistics
Energy Services & Facilities Management
Industrial Waste Management & Services
Water & Wastewater Management
Waste services(collection, transfer, recycling, disposal, on-site management)Hazardous waste services (incineration, fuels blending, recycling and recovery, emergency & special services)Industrial services (industrial cleaning, mechanical services, sewer services, dewatering)Waste-To-Energy (waste combustion, energy recovery, facility operation, facility maintenance, retrofitting).
Management of rail sidings & associated internal logistics (loading, unloading, maintenance of loco-tractors and other equipment)Regional and long-distance rail freight transportationCompany personnel transportation
Management of energy utilities for the production process(steam, power production in situ, cold, compressed air, etc.)Industrial maintenance of the production processHeating, ventilation and air conditioningManagement of buildings and associated technical services, facilities management
Veolia EnvironnementVeolia Environnement
SAWEA 2006-06-07
Our Activity:Our Activity:
Who we are . . .
► Water & WastewaterOperating Services
► Water & Wastewater Systems Integrator
► Comprehensive Technology Solutions & Equipment Provider Outsourcing
Services
Technical Solutions
A “World Class” Organization # Dedicated to Innovation # 2,500 Patents # €110 million Annual R&D Spend600 Research Staff # 77,000 Employees # 7,000 Active O&M Contracts # €13.3 billion Turnover
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Our Activity: a Water Cycle SpecialistOur Activity: a Water Cycle Specialist
Drinking Waterproduction
Raw water resource
management
Network management
Preservation of water quality during transportation
Wastewatercollection
Wastewater Treatment
Sludge
CustomerManagement
Integrated approach to protectthe environment
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Purpose: preserving a precious resourcePurpose: preserving a precious resource
2 - Prevention of chronic contamination
1 - Prevention of accidental contamination 3 - Monitoring
of resources
8 - Aquifer recharge
7 - Wastewater re-use
6 - Desalination of sea wateror brackish water
5 - Saving water
4 - Managing catchments in a sustainable way
To protect To optimise management
To developalternatives resources
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General Data Saudi ArabiaGeneral Data Saudi Arabia
Saudi Arabia
► Population growth: from 7 million (1970) to 25 million (today) to 47 million (2025)
► Water availability per capita: from 900 m³ (1950) to 113 m³ (2025)
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ChallengeChallenge
► Challenge► Growing Gap between demand and available supply of potable water
► Solutions► (1) New Desalination projects (seawater – brackish water)► (2) Alternatives
► Demand Management (water demand forecast & management)► Improved Efficiency► Re-use of wastewater
► Development► Towards PPP
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(1) Desalination(1) Desalination
► Saudi Arabia: world largest desalinated water producer
► Installing new capacity is critical to meet demand► Current capacity approx 6.5 Million cubic meters per day
► Seawater 72%, Brackish Water 25%, others 3%► Approx 50 large plants (> 50000 m³/day) & Approx 200 smaller plants
► Estimated needed capacity by 2020: 11.9 Million cubic meters a day► Of which planned: 4.2 Million cubic meters a day (requiring capital
investments of + $6 Billion & operation expenses of + $1.3 Billion)► Estimated extra by 2020: 5.4 Million cubic meters a day, most of which is
from seawater desalination (4 Million m³/day).► Approx 2.1 Million cubic meters a day is expected to be installed by 2010
► Desalination Outlook / Project Funding► Government► Private Developers (IWPP)
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(2) Alternative: Demand Management(2) Alternative: Demand Management
► a. Water demand forecast :► Water consumption and production projections► Infrastructure development planning
► b. Water demand management : ► Involves all aspects of technical and commercial water
management that contribute to an optimal use of the limited water resource
► c. Objectives of water demand forecast & management:► Infrastructure planning : Capital Expenditures ► Define Management Policies : O&M Expenditures
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(2) Alternative: Demand Management(2) Alternative: Demand Management
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(2) Alternative : Others(2) Alternative : Others
Efficiency Improvements► UFW (Unaccounted For Water), due to
► Unbilled metered consumption► Leakages (mains – storage)► Etc
► Awareness campaigns started
Re-use of waste water► Limited practice in Saudi Arabia
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DevelopmentsDevelopments
INCREASE CUSTOMER SATISFACTION
► Increase supply - Continuous supply► And improvements to save water
TREND
► PPP : Public Private Partnership► PPP: way of co-operation between a public authority and a private company► The public authority assigns the execution of the service to a private-sector
company► The public authority retains responsibility for defining the policy and taking
strategic decisions► The public authority remains owner of the infrastructure► It is not privatization
► PPP contract tailored to the situation and the priority objectives
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Developments what kind of PPP ?Developments what kind of PPP ?
All partnerships are tailor madeAll partnerships are tailor made
Consultancy Privatisation
Public - PrivatePartnership
Contract model
Main issues to tailor the contract to local conditions
Customer RelationshipManagement
Financing
Environment
EconomicsWater resource management
Water safety
Social policy
Technology transfer
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Possible partnership models
Innovative Partnershipsfor the
Oil & Gas Industry
Possible partnership models
Innovative Partnershipsfor the
Oil & Gas Industry
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Common QuestionsCommon Questions
Who can support you through all
stages of a project …
How can you guarantee performance?
How can you establish continuity between the
construction and operational phases?
How can you optimize industrial investment
How can the best technology and practice be deployed in process
support facilities?
… and help you to focus on your core
business?
Design
Construction
Operation
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Optimizing the water cycle: one of your objectives - our know-howOptimizing the water cycle: one of your objectives - our know-how
Waste water treatment re-use and recycling
Cooling water
Water output treatment
In-Process solutions
Network management
Injection water treatment
Industrial water production
Boiler feed water
Produced water management
Industrial water supply(fire-fighting cleaning)
Our key commitmentsGuaranteed availability and quality of water, from raw resource to point of use
Optimization of site water consumption
Reuse water
Environmental compliance
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Possible partnership modelsPossible partnership models
1. « pure » outsourcing contract to Veolia (O&M business model)
2. Creation of a JV (i.e. between Client & Veolia The JV acquires the assets and operates them (JV AO&M business model)
3. Acquisition and operations & maintenance of the assetsby Veolia (AO&M business model)
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Common characteristics of the 3 modelsCommon characteristics of the 3 models
► Reduction in operating costs over the long term / Permanent optimisation and progress ► Optimisation of the existing facilities through technical rather than
technological solutions (Operator’s logic)► Continuous work to reduce operation expenditures and investments needs
(savings sharing mechanism to be defined)
► Securing reliability of production / discharge limits compliance by engaging a competent services provider to operate, maintain and invest in the water facilities
► Transfer of operating risk whilst maintaining accountability
► Access to latest technologies and systems
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Advantages / disadvantages of each modelAdvantages / disadvantages of each model
O&Mbusiness model
JVAO&Mbusiness model
AO&Mbusiness model
Advantages ► Basic & flexible contractualengineering
► Easy to implement
► Personnel transfer issues generally easier to solve (personnel still belongs to a Hellenic Petroleum entity)► “open book”approach
► Clear split of responsibilities
► Disposal or sale of ‘non-core’ assets to generate capital► Reduction in core business headcount
Disadvantages ► Reducedcontractual flexibilitythrough assetsownership
► Sensitive personnel issues may arise
► Reducedcontractual flexibilitythrough assetsownership
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Our ApproachOur Approach
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3 3 -- Innovative business modelInnovative business model3 3 -- Innovative business modelInnovative business modelAssets acquisition ; Joint ventureAssets acquisition ; Joint venture
Bring added value from a partnership: How?Bring added value from a partnership: How?
1 1 -- Focus on the WWTPFocus on the WWTP1 1 -- Focus on the WWTPFocus on the WWTPLong run guarantees
– Performance– Price
Permanent optimisation and progress
Access to Veolia Water know-how
2 2 -- Bring Bring VeoliaVeolia Water expertise Water expertise on water cycle on water cycle optimisationoptimisation
1 1 -- Focus on dedicated Focus on dedicated perimeterperimeterLong term guarantees
– Performance– Price
Permanent optimisation and progress
Access to Veolia Water know-how
Network management
Boiler feed water
Waste water treatment re-use and recycling
Cooling water
Network management
Boiler feed water
Water & Waste water treatment re-use and
recycling
Cooling water
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Where do we want to go ?Where do we want to go ?
Our commitments Your guaranteesREFERENCE SITUATION TAILOR-MADE CONTRACTS
QUALITY
Contract based on service qualityContract based on service quality Dedicated service level agreementDedicated service level agreement
Contract management: on-site manager and suitable operational structure
Contract management: on-site manager and suitable operational structure Clear roles and responsibilitiesClear roles and responsibilities
MANAGEMENT
Objective long term view of your cost centersObjective long term view of your cost centersTransparent and flexible pricing budget, guaranteed over contract term
Transparent and flexible pricing budget, guaranteed over contract term
COST
KPI delivery and monitoring to achieve more ambitious efficiency goals
KPI delivery and monitoring to achieve more ambitious efficiency goals
Measuring results, ensuring improvementsin quality and performanceMeasuring results, ensuring improvementsin quality and performance
RESULTS
Flexible contract providing for change of scopeFlexible contract providing for change of scope Adjustment to production variables and regulatory upgradesAdjustment to production variables and regulatory upgrades
SCOPE
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Project phasesProject phases
Objectives:- set up the technical and
reference costs (baseline)
- identify the main technical and economical improvements
Objectives:
- make the necessary complementary studies
- schedule the improvements implementation
- set up the business plan
MoU
2 to 4 months
Bindingproposal
Targets:
Hellenic Petroleum / VW joint definition of:
- the commitments,
- the guarantees
- the Key Performance Indicators (KPI) values
1 month
ContractPreliminaryproposal
1 month
Phase 3:Guarantees
and commitments
Phase 2:Detailed Diagnosis
+ value proposition VW
Phase 1:Preliminary Diagnosis
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How to evaluate the performance of a partnership?How to evaluate the performance of a partnership?
FINANCIAL
> Savings against targets
> Energy & Water consumption
> Water discharge volumes
ENVIRONMENTAL
> Conformance
> Compliance
> Continuous improvement
SAFETY
> Reduce Customer incidents in relevant areas
> Specific actions and programs to prevent incidents
QUALITY
> Delivery performance
> Maintenance efficiency
> Plant availability
PERFORMANCE
> Availability
> Reliability
> NTK
> Exchanger cleaning intervals
PROACTIVITY
> Delivery of new initiatives
Typical Key Performance Indicator Areas:
All KPI Critical to Sustainable Development Goals
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Veolia WaterVeolia Water
Our Partnerships . . .
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Oil and Gas ExperienceOil and Gas Experience
Our Experience . . .► 75 Existing Projects Worldwide► DBOM; DBO; DB► €168 Million Annual Turnover (2004)► Facility Types
►Refineries►Terminals►Off-shore Production►On-shore Production
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Oil and Gas ExperienceOil and Gas Experience
Our Experience . . .
► Treatment Services► Wastewater ► Process Water► Produced Water► Residuals Management
► Technology Solutions► Physical, Chemical, Biological
and Membrane Systems► Reuse and Recovery Systems► Destruction Systems
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Cooling Tower Blowdown TreatmentCooling Tower Blowdown Treatment
Neutralization Tank
New Multiflo™ 300 Chemical Softener (800 m3/hr – 3,500 GPM)
Tot. Hardness < 80 mg/l Silica < 20 mg/l
Lime / Soda Ash
Acid
150 Micron Cartridge Filters (3) UF Membranes
(270 m3/hr – 1,200 GPM) ea.
IX Softener Feed Tank
NTU < 0.2 SDI < 3
(3) SAC Ion Exchange (250 m3/hr – 1,100 GPM)
ea.
RO Feed Tank
Ca < 1 mg/l Mg < 0.6 mg/l(3) RO Membranes
(250 m3/hr – 1,100 GPM) ea.
Reject (20% Feed) < 10 mg/l Total Hardness to Cooling Tower Makeup
TDS < 15 mg/l Silica < 0.7 mg/l
RO Permeate Storage
Tank
(2) Mixed Bed Polishers (165 m3/hr – 725 GPM)
ea.
Polished Water Tank
EC < 1.0 µS/cm Silica < 10 ppb
Former blowdown to discharge
To boilers
SASOL GTLSASOL GTL
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Case StudiesOil & Gas SectorCase StudiesOil & Gas Sector
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O&M business modelCase: France – BP Lavera « Pure » outsourcing contract
O&M business modelCase: France – BP Lavera « Pure » outsourcing contract
What were the customer needs?• Environmental compliance• Operating costs optimization
Key feature of our offer:
A long term partnership based on:> Committees in charge of strategic and technical
issues / regular meetings > Performance reviews and improvement plans > A Safety program that best fitted all the refinery’s
requirements
A two steps approach:> Optimising the waste water treatment plant> Upgrading through a mid-term investment program
The contract was signed on October 2000 for a period of 10 years
• Capital Expenditure minimization• specific water expertise access
SAWEA 2006-06-07
JVAO&M business model Case: USA – ConocoPhillips Creation of a JVJVAO&M business model Case: USA – ConocoPhillips Creation of a JV
What were the customer needs?
Conoco-Phillips was searching for a
What was our offer?Veolia Water purchased a 50% interest in Hydroserve Westlake LLC, owner of the utility assets that serve ConocoPhilips’ refinery at LakeCharles
Veolia Water now operates the refinery’s surface water treatment and biological wastewater treatments assets with an on-site staff of water treatment specialists
This long-term contract began in 2000 for a period of 15 years
In 2003, the National Petroleum and Refiners Association (NPRA) presented Veolia Water with a “Contractor Award for Meritorious Safety Performance” at the association's annual National Environmental and Safety Conference for work at this project.
new investor and operator for the management of its waterand wastewater treatment assets.
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AO&M business modelCase: Korea – Lotte Daesan Company Acquisition of the assets by VeoliaAO&M business modelCase: Korea – Lotte Daesan Company Acquisition of the assets by Veolia
Scope of services:> two pre-treatment lines: 120,000 m3/d> one reverse osmosis unit: 84,000 m3/d> two demineralised water lines: 49,000 m3/d> two drinking water prod. lines: 4,000 m3/d> two cooling systems: 2,000,000 m3/d
Technology used:> pre-treatment process: Clarification / Sand
filtration/ Sludge treatment (thickening and dehydration)
> production of osmosis-treated water: Polishing /Membrane techniques
> production of demineralised water: Deionisation / Active carbon filtration and Polishing
The contract was signed on March 2000for a period of 20 years
What were the customer needs?
In the context of a financial restructuring of the company, HPC decided to sell its drinking and industrial water production assets, considered as non-core business.
transfer risks and responsibilities associated with operating these water treatment facilities to an expert service provider.
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2006 PPP Reference: SINOPEC2006 PPP Reference: SINOPEC
► Joint-venture (JV) was created between Sinopec and Veolia Water to take over, upgrade and operate all the facilities.
► JV purchased the wastewater treatment assets and was assigned all the wastewater treatments contracts.
► Exiting facilities include► 3 industrial WWTPs (20 Mm3/yr)► 2 wastewater reclaim facilities (8 Mm3/yr) and one domestic WWTP (1.3 Mm3/yr)
► The scope of services includes:► Improvement of operation and maintenance of the global wastewater treatment
facilities► Increase in capacity and efficiency of the two reclamation units
► The long-term JV allows Sinopec to focus on its core activities whilst ensuring cost control
SAWEA 2006-06-07
Q&AQ&A
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