Advance Membrane Water Treatment Systems Advance Membrane Water Treatment Systems International Business and Education Conference International Business and Education Conference

A Focus on Water Management A Focus on Water Management –– June 16, 2004 June 16, 2004 Worchester Polytechnic InstituteWorchester Polytechnic Institute

Ark W. PangVP Business DevelopmentIonics, Incorporatedapang@ionics.com

Ionics, Incorporated - OverviewIonics, Incorporated - Overview•• Estimated 2004 Revenues: $500 MillionEstimated 2004 Revenues: $500 Million•• 2,400 employees in over 50 offices worldwide2,400 employees in over 50 offices worldwide•• Ionics has supplied more than 4,000 desalination Ionics has supplied more than 4,000 desalination

plants worldwideplants worldwide•• Founded in 1948 as a water purification company Founded in 1948 as a water purification company

using membrane technologyusing membrane technology•• Ionics pioneered membrane desalination BOO Ionics pioneered membrane desalination BOO

projects over 20 years ago, and has invested over projects over 20 years ago, and has invested over $300 million of its own equity in over 200 BOO $300 million of its own equity in over 200 BOO investment projects worldwideinvestment projects worldwide

•• Ionics today is one of the largest publiclyIonics today is one of the largest publicly--owned U.S. owned U.S. water treatment company (NYSE water treatment company (NYSE –– ION)ION)

Ionics Water Desalination Market ShareN

umbe

r of U

nits

>10

0 cu

bic

met

ers

per d

ay

0

250

500

750

1000

Source: Klaus Wagnick (2002 IDA Worldwide Desalting Plants Inventory Report)

Ioni

cs

USFilte

r

Al K

awthe

r

Christ

Ace W

ater

USF A

rabia

Kurita

Nomur

aMeti

to Gro

up

Organ

o

IDE

Culliga

n

Side

m

KECO

Sasa

kura

TEDAG

UAIon

ics R

CC

Ondeo

Weir

Tec

hna

Acwa

USF B

ekox

VATe

ch W

abag

Alfa

Lava

lW

aterlin

kGetc

o

Wate

r&Po

werHyd

ropr

oFis

ia

For the period 1992 - 2002

Membrane TechnologyMembrane Technology

•• MembranesMembranes–– EDREDR

(Electrodialysis Reversal) (Electrodialysis Reversal)

–– RORO(Reverse Osmosis) (Reverse Osmosis)

–– EDIEDI(Electrodeionization) (Electrodeionization)

–– UFUF(Ultrafiltration)(Ultrafiltration)

–– MFMF(Microfiltration)(Microfiltration)

Ionics RO Membrane CapabilitiesIonics RO Membrane Capabilities

•• Sea Water & Brackish Water RO MembranesSea Water & Brackish Water RO Membranes•• Joint Venture: Toray Membrane of AmericaJoint Venture: Toray Membrane of America•• Ionics: Ionics: 43% ownership 43% ownership •• Location: Location: IonicsIonics’’ existing membraneexisting membrane

manufacturing facility inmanufacturing facility inWatertown, MAWatertown, MA

Ionics Strategic Membrane AlliancesIonics Strategic Membrane Alliances

•• Formed relationship with Formed relationship with NORIT (Netherlands)NORIT (Netherlands)

•• Strengthened IonicsStrengthened Ionics’’ technology technology offering in hollow fiber offering in hollow fiber ultrafiltration (UF) membranes ultrafiltration (UF) membranes for for key markets:key markets:

–– water reusewater reuse–– municipal drinking watermunicipal drinking water–– RO pretreatmentRO pretreatment

World’s Water SourcesWorld’s Water Sources

•• 97% of the world97% of the world’’s water is saltwater from seawater s water is saltwater from seawater and brackish water sourcesand brackish water sources

•• Less than 1% of the worldLess than 1% of the world’’s water sources is s water sources is considered potableconsidered potable

•• Constructing new dams and over pumping of aquifers Constructing new dams and over pumping of aquifers to tap the above 1% of limited potable water can no to tap the above 1% of limited potable water can no longer be the only solution to solve the worldlonger be the only solution to solve the world’’s water s water shortage problems:shortage problems:

–– These conventional water supply sources can be unreliable These conventional water supply sources can be unreliable and inadequate to meet the growing population needs for a and inadequate to meet the growing population needs for a safe potable water supplysafe potable water supply

–– In many cases these water supply sources are too costly to In many cases these water supply sources are too costly to justify and environmentally prohibitive justify and environmentally prohibitive

Regions of Water ScarcityRegions of Water Scarcity

•• The United Nations The United Nations in 2001 in 2001 ““International Year of International Year of FreshwaterFreshwater”” identified 18 countries that have a identified 18 countries that have a critical water shortage:critical water shortage:

–– Mainly in the Middle East and North AfricaMainly in the Middle East and North Africa–– And a few countries in Europe, Asia and the CaribbeanAnd a few countries in Europe, Asia and the Caribbean

•• In the year 2025 it is projected the above number of In the year 2025 it is projected the above number of countries will increase to 29:countries will increase to 29:

–– Population in current water scarce regions is expected to Population in current water scarce regions is expected to double exceedingdouble exceeding

–– Population is shifting to urban areasPopulation is shifting to urban areas–– Political Political ““water conflictswater conflicts”” and the need to be water and the need to be water

independent have created regional water shortagesindependent have created regional water shortages

Measures to Relieve the Water ScarcityMeasures to Relieve the Water Scarcity

•• Repair potable water distribution pipelines Repair potable water distribution pipelines •• Public awareness and Water Rate Increases to Public awareness and Water Rate Increases to

promote Water Conservationpromote Water Conservation•• Water saving techniques for crop irrigationWater saving techniques for crop irrigation•• Prudent use of membrane technology for the Prudent use of membrane technology for the

desalination of rechargeable brackish water aquifersdesalination of rechargeable brackish water aquifers•• Increase the use of advanced membrane technology Increase the use of advanced membrane technology

for wastewater reclamationfor wastewater reclamation•• The prudent use of reverse osmosis membrane The prudent use of reverse osmosis membrane

desalination technology to produce drinking water desalination technology to produce drinking water from seawater, the unlimited feedwater supplyfrom seawater, the unlimited feedwater supply

Desalination Technologies - SeawaterDesalination Technologies - Seawater•• Thermal Seawater Evaporation Thermal Seawater Evaporation

–– MultiMulti--Stage Flash (MSF) widely used in the Middle East for Stage Flash (MSF) widely used in the Middle East for large capacity plants (50+mgd) drawing waste heat from large capacity plants (50+mgd) drawing waste heat from adjacent power station, justified by the low cost oil & gas.adjacent power station, justified by the low cost oil & gas.

–– MultiMulti--Effect Distillation (MED) higher efficiency thermal Effect Distillation (MED) higher efficiency thermal process, taking some MSF market share, but primarily used process, taking some MSF market share, but primarily used on small to medium capacity installations.on small to medium capacity installations.

•• Seawater Reverse Osmosis (SWRO)Seawater Reverse Osmosis (SWRO) mature membrane mature membrane technology which is steadily taking market share due to technology which is steadily taking market share due to improvements in membrane performance, stateimprovements in membrane performance, state--ofof--thethe--art energy art energy recovery devices and pretreatment methodsrecovery devices and pretreatment methods

•• Hybrid Desalination SystemsHybrid Desalination Systems combines the use of SWRO and combines the use of SWRO and thermal processes to reduce overall capital and operating cost. thermal processes to reduce overall capital and operating cost. The first large commercial installations are currently being buiThe first large commercial installations are currently being built in lt in the Middle Eastthe Middle East

Seawater SWRO – A Growing MarketSeawater SWRO – A Growing Market•• SWRO Projects SWRO Projects –– Construction CostsConstruction Costs

–– $10 billion estimated to be spent over the next 5 years$10 billion estimated to be spent over the next 5 years–– $70 billion estimated to be spent over the next 20 years$70 billion estimated to be spent over the next 20 years

•• Membrane desalination has grown 10 times as fast as Membrane desalination has grown 10 times as fast as Thermal processes over the last 20 yearsThermal processes over the last 20 years

•• What is driving SWRO market grow?What is driving SWRO market grow?–– 10 fold reduction in water cost over the last 20 years10 fold reduction in water cost over the last 20 years–– Cost of water is becoming competitive with tradition water Cost of water is becoming competitive with tradition water

supply schemes (dams, reservoirs, filtration, pipelines)supply schemes (dams, reservoirs, filtration, pipelines)–– Development & Construction period is shorter than tradition Development & Construction period is shorter than tradition

water supply schemeswater supply schemes–– Growing need to be water independent and to have a secure Growing need to be water independent and to have a secure

independent water supply alternative.independent water supply alternative.–– Availability of Availability of ““nonnon--recourserecourse”” financing to fund the growing financing to fund the growing

BuildBuild--OwnOwn--Operate (BOO) desalination marketOperate (BOO) desalination market

DESALINATION

Seawater Desalination – Competitive Price

Total Water CostsTotal Water Costs$

per C

ubic

Met

er

$1.00

$2.00

$6.50

01980 1990 2000

Desalination Technology/Process Market by Capacity

Otherprocesses

0%

Membrane 45%

Thermal55%

By installed capacity

Examples of Ionics BOOT Desalination and Water Reclamation Contracts

Examples of Ionics BOOT Desalination and Water Reclamation Contracts

Trinidad and Tobago (2002)Trinidad and Tobago (2002)•• Currently the worldCurrently the world’’s largest s largest

operating DBOO desalination operating DBOO desalination plant.plant.

•• Client Client –– WASA, Local WASA, Local MunicipalityMunicipality

•• Relieves the shortage of potable Relieves the shortage of potable water in surrounding towns.water in surrounding towns.

•• 2 year construction period2 year construction period•• Over 2 years of continuous Over 2 years of continuous

operationoperation•• Capacity Capacity –– 136,000 m3/d136,000 m3/d•• 22 year water sales contract22 year water sales contract•• Investment $150 millionInvestment $150 million•• Ionics RolesIonics Roles

–– 40% Equity investor40% Equity investor–– Desalination process providerDesalination process provider–– LongLong--term operation contractorterm operation contractor

Trinidad Project StructureTrinidad Project Structure

Hafeez Karamath Engineering Services

Ionics, Incorporated

20% Equity

Desalcott Ltd

80% Debt

WASA

Ministry of Finance

60% 40%

Payment

Guarantee

O&M contract

Republic Bank Trinidad

Advisor: In-house

Lead EPC- Ionics & local Contractors

Technology -Ionics

Ionics Service Contract to Desalcot

Trinidad and Tobago (2002)Trinidad and Tobago (2002)

Feed Water Source:Feed Water Source:•• Gulf of PariaGulf of Paria

–– TurbidTurbid–– High Blooms of Marine High Blooms of Marine

GrowthGrowth–– Commercial TrafficCommercial Traffic–– Jellyfish & MusselsJellyfish & Mussels

Process design DataProcess design Data•• Salinity 15,000 Salinity 15,000 -- 35,000 mg/l35,000 mg/l

•• Temp 26.6 Temp 26.6 -- 30.0 30.0 ººCC

•• TSSTSS 8.0 8.0 -- 107.0 mg/l107.0 mg/l

Trinidad and Tobago (2002)Trinidad and Tobago (2002)

Trinidad Seawater Desalination Project 136,000 cubic meters per day

SeawaterSeawaterRORO

Brackish Water Brackish Water RORO

StorageStorage

DistributionDistribution

RawRawSeawaterSeawater

CoagulantCoagulantChlorineChlorine PostPost--TreatmentTreatment

ReRe--mineralizationmineralizationLine, pH, ClLine, pH, Cl22

Gravity FiltrationRapid MixRapid Mix

Flocculation Flocculation SedimentationSedimentation Average SDI 3.0

Trinidad and Tobago (2002)Trinidad and Tobago (2002)

Seawater Intake System

Trinidad and Tobago (2002)Trinidad and Tobago (2002)

Seawater Pretreatment System

Trinidad and Tobago (2002)Trinidad and Tobago (2002)

Gravity Media Filters and Micron Filters

Trinidad and Tobago (2002)Trinidad and Tobago (2002)

Seawater RO Modular Skids

Trinidad and Tobago (2002)Trinidad and Tobago (2002)

Product Water Treatment

Trinidad and Tobago (2002)Trinidad and Tobago (2002)

Desalination Facility

Kuwait (to be completed 2005)Kuwait (to be completed 2005)

•• Sulaibiya Water Reuse ProjectSulaibiya Water Reuse Project•• WorldWorld’’s largest DBOO water reuse contracts largest DBOO water reuse contract•• Client Client -- Ministry of Finance, signed 5/02Ministry of Finance, signed 5/02•• Will be in operation in 2005, less than 3 Will be in operation in 2005, less than 3

year construction periodyear construction period•• Potable water quality for nonPotable water quality for non--potable use potable use ––

agriculture, landscapingagriculture, landscaping•• Capacity 375,000 m3/d, $400 million Capacity 375,000 m3/d, $400 million

InvestmentInvestment•• Conventional primary and secondary Conventional primary and secondary

wastewater treatment facilitywastewater treatment facility•• UF/BWRO UF/BWRO -- Advance integrated membrane Advance integrated membrane

tertiary treatment facilitytertiary treatment facility•• 27 year water sales contract27 year water sales contract•• Ionics 25% shareholder

Artist View

Ionics 25% shareholder

Sulaibiya Waste Water Reclamation Project: StructureSulaibiya Waste Water Reclamation Project: Structure

Ionics IncorporatedKharafi Group

Consortium of Kuwaiti Financial Institutions led by National Bank

of Kuwait

15% Equity

UDC

85% Debt

Ministry of Public Works

Ministry of Finance

75% 25%

25 yr. Loan$370 MM in KD

Payment

Guarantee

27.5 year Service Contract

(30 yr. Concession)

O&M contract

Lead EPC- Kharafi Group Construction -Phillip

Holtzmann(Kharafi Group)

Membrane Technology -Ionics

EPC

Kharafi GroupIonics

SLUDGEDISPOSAL

GENERAL LAYOUT(AS PER TENDER DOCUMENT)GENERAL LAYOUT(AS PER TENDER DOCUMENT)

RAW WASTEWATER

GRITREMOVAL

pH ADJUSTMENTPREAERATION

BASINS

PRIMARYCLARIFIERS

SLUDGEDISPOSAL

MF/UFRO

BRINE

OZONATION

CHLORINATIONCONTACT BASIN

PURIFIEDWATER

FLOCCULATION

- COAGULANT- COAGULANT AID- SANITISER

CHEMICALDOSING

FLOCCULATION

FINALCLARIFIERS

SLUDGEDISPOSAL

STATICMIXERS

HPP

BIOLOGICALPROCESS

GENERAL LAYOUT - SULAIBIYA(PROPOSAL)

GENERAL LAYOUT - SULAIBIYA(PROPOSAL)

AERATIONBASINS

SECONDARYCLARIFIERS

•Odour •Flies•Septicity•Rising sludge•Rekka experience

PRIMARYCLARIFIERS

SLUDGEDISPOSAL

pH ADJUSTMENTPREAERATION

BASINS

ARDIYA

SCREENS EXTENDED GRIT& FOG REMOVAL

•Local Kuwait data•Screenings, fats, oils & extended grit removal

•Protection to rising main& downstream processes

OXYGENINJECTION

•Prevents septic conditions

•Eliminates odours•Provides treatmentin pipeline

SLUDGEDISPOSAL

•Biological treatmentof odourous air

•Kharafi operatingdata

BIOLOGICALPROCESS

SECONDARYCLARIFIERS

PREAERATIONBASINS

SLUDGEDISPOSAL

WARNING!•Mitigate sand

ingress•Minimise interstage

pumping

FLOCCULATION

- COAGULANT- COAGULANT AID- SANITISER

CHEMICALDOSING

FLOCCULATION

FINALCLARIFIERS

SLUDGEDISPOSAL

STATICMIXERS

•Effluent quality 10:5 (SS:BOD)

SANDFILTER

FILTRATETANK

•MF/RO can cope with SS peaks of 100mg/l

SANDFILTER

FILTRATETANK

CLEARWELL

MICROSTRAINERS

CHLORINE

BUFFERINGWELL UF

•Protection to membranes•Chlorine added to preventbiofouling of membranes

•MF provides adequate protection to RO

•Reduced power requirements

•Minimise water usage •Further disinfectionunnecessary

OZONATIONCO2 STRIPPING

•pH adjustment

Kuwait (to be completed 2005)Kuwait (to be completed 2005)

Aeration Tanks 3&4

Kuwait (to be completed 2005)Kuwait (to be completed 2005)

Secondary Clarifiers

Kuwait (to be completed 2005)Kuwait (to be completed 2005)

Ultra Filtration Building

Kuwait (to be completed 2005)Kuwait (to be completed 2005)

Ultra Filtration Skids Provided by Ionics

Kuwait (to be completed 2005)Kuwait (to be completed 2005)Installed RO SKIDS & Piping

Focusing on Our Strengths