Iran has officially launched the first phase of an ambitious project valued at US$ 1 billion to pump water from the Caspian Sea to a city in its vast and expanding central desert, state media reported.
The initial phase will see a desalination plant and pipes built over the next two years to supply water to the desert city of Semnan, population 200,000, according to officials.
“The desert is growing… therefore we need to control its growth,” President Mahmoud Ahmadinejad said in a speech in the northern city of Sari, near the Caspian shore.
The first phase would see water for drinking, irrigation and industrial use taken from the Caspian, treated to rid it of salt, and pumped to Semnan, 150 kilometers (90 miles) away to the south.
The first desalination plant to be built would have a capacity of 200 million cubic meters per year, or 548 million liters a day, according to Energy Minister Majid Namjou.
Khatam Al-Anbiya group, the industrial arm of Iran’s military Revolutionary Guards which has interests in key economic sectors, is handling work on the project.
Later, two other phases are planned that would pump more water into desert areas from the Caspian Sea and from the Gulf, the state media said.
Iran has operated several other desalination plants for decades for other regions. Such seawater treatment facilities are also in use in other wealthy and arid Middle East countries, including the United Arab Emirates, Saudi Arabia and Israel, to augment scarce water supplies. -
Iran needs an additional 1.27 million m3/d of desalination capacity by 2015.
It is a figure that will whet the appetite of many in the desalination industry: 1.27 million m3/d. That is the required additional desalination capacity needed in Iran by 2015, according to government consultant Moshanir.
It is an impressive target which reflects Iran’s desire to capitalize on its rich natural resources to boost economic growth in what is the Middle East’s most populous country. And water is central to this strategy.
Mohammad Kiaei, deputy managing director of Moshanir, presented the forecasts at GWI’s Water Meets Money conference on 2 April. The predictions are largely based on work carried out by Iranian engineering consultant Rahshahr, which is creating an infrastructure masterplan for the Ministry of Oil in the South Pars gas field, and for the Ministry of Mines and Metals in the coastal area allocated for energy-intensive industries.
Iran has at its disposal 11% of global oil reserves and 15% of the world’s gas reserves. It shares the world’s largest gas field with Qatar in the South Pars. Moshanir states that until 2015, Iran needs $170 billion of investment in the oil and gas industry alone. This translates into $50 billion of upstream investment, $30 billion of petrochemical expenditure, $70 billion in gas and LNG production and $20 billion to extend current refinery capacity by 2.5 million barrels per day.
To meet this expansion, it is estimated that oil and gas projects will need an extra 255,320m3/d of desalination capacity. This is made up of 54,000m3/d to serve the new phase of gas refineries in South Pars, 35,000m3/d for Mobin Petrochemical (South Pars) and 166,320m3/d for Fajr Phase II.
The large energy-intensive industries which Iran is developing along its coast are also major consumers of water.
“The government is going to locate these intensive energy-consuming projects in the area which is near the energy sources: gas and oil,” says Kiaei. Iran sees it as an important opportunity to make the most of its natural resources (there are significant mineral deposits in the area) and create jobs in a country with a youthful population eager for employment opportunities. This will become all the more important as Iran’s population is set to grow by almost a third by 2020
The studies predict that these future projects will require around 170,000m3/d of desalinated water. The projects include: 2 million tons per year of aluminium production, requiring 20,000m3/d of water; 15 million tons of annual steel production, requiring 90,000m3/d of water; and 6 million tons per annum of cement manufacturing capacity, requiring 60,000m3/d.
Irrigation will be a major consumer of desalinated water. As per the United Nations Industrial Development Organization requirements, the intention is to set aside 15% of industrial land for greenery. With each acre needing 70 m3/d of water, the total required is likely to be around 262,000m3/d.
In order to meet this demand, the Iranian government is hoping to attract private investment. “Such a big project needs a big investment. To provide funding we are looking to private finance,” says Kiaei. “In the past, municipalities or governments awarded the projects on an EPC basis. But for the moment, the country is trying to enter into private finance: BOT or BOO. This is already happening in power. We have a lot of power stations that have recently been awarded through BOO contracts to both Iranian and foreign companies.”
The government’s vision can be seen in the example of the Pars Special Energy Economic Zone (PSEEZ), which is controlled by the government through the National Iranian Oil Company. The intention is for the PSEEZ to supply core infrastructure: “What the government is going to do is to prepare the infrastructure for the area in order that the contractors and investors [...] just come for investment,” says Kiaei. “If the utility is supplied by another party, then they [the industrial plant developers] will be relieved of commitment and they can go about their original job which is industrial plants.” Kiaei also believes that the BOT delivery method is particularly attractive to the Iranian government as it removes the responsibility for operating the utility from the government, provides additional capital, and allows risk to be shared with the party best able to manage it – the contractor.
The BOT model has not been widely used to develop desalination projects in Iran, although it has been utilised on previous occasions. The first of these was on the island of Kish, Iran’s free trade zone and main resort island. According to Moshanir’s projections, Kish needs an additional 34,000m3/d of desalination capacity by 2015. When combined with the other Persian Gulf islands, this total reaches 109,000m3/d.
Elsewhere, domestic desalination needs are set to reach 372,105m3/d by 2015, with demand highest in Khuzestan (28,235m3/d), Sistan & Baluchestan (15,855m3/d), Fars (11,215m3/d) and Isfahan (11,780m3/d). Agriculture will need a further 100,000m3/d.
Without a doubt there is work to be done, and with a barrel of crude trading at just under $70, there is certainly money available. However, with international relations increasingly frosty, international appetite for these opportunities could be limited.