Saudi Aramco: Public

GCC Testing Lab: Business Enablement

Dubai

May 15th , 2017

Saudi Aramco: Public

Outline

Strategic Drives

Business Portfolio

Opportunities

Business Enablement

Conclusion

Saudi Aramco: Public

1 Optimize Quality, Time & Cost

2 Create Knowledge Economy

3 Localize Manufacturing & Services

4 Create High-skilled Jobs

5 Promote Applied R&D

6 Develop Standards & O&M Practices

GCC Lab Benefits to GCC/MENA

Competitive Advantages

Saudi Aramco: Public

GCC Lab Stakeholders

2007. Inception

2011. Feasibility study

Formation of shareholders

2015.

JV partners selection

Legal establishment

2013.

2016.

Category Shareholders

End-users

Manufacturers

Service providers

Financial investors

R&D

هيئة الربط الخليجيGCCIA

Strategic Shareholders

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iii. Accelerate

business growth

i. Develop

internal capabilities

iv. Establish

partnerships

ii. Build

infrastructure

Long-term strategic objectives

Vision

Mission

Short-term strategic priorities

1

2

3

4

Business goals

5

I. Provide world

class TIC services

in the power sector

II. Attain financial

sustainability

III. Advance local

innovation &

knowledge Economy

IV. Develop local

workforce

Achieve global leadership in testing, inspection, certification and innovation for the power Industry

Advance safety, efficiency and innovation in the GCC power sector by profitably delivering

world class services and solutions enabled by highly skilled people, efficient workflows and

state of the art operating facilities

2017

• US$ 1 million revenues

• Preferred TIC1 services vendor with SEC and Saudi Aramco

• 2 major Saudi customers acquisition

2018

• US$ 5 million revenues

• 1st non-KSA GCC customer

2019

• US$ 7 million revenues

• 2nd non-KSA GCC customer

2017

• Efficient operating model deployment

• Support functions and enablers implementation

• HR plan execution for Calibration & Testing labs

2018

• HR plan execution for Renewables & Smart Grid lab

2019

• HR plan execution for Industrial lab (Phase 1)

2017

• JV partnership for Renewables & Smart Grid lab

• JV partnership for Industrial labs

• R&D strategy development

2018

• Partnership for Appliances & Electronics lab

• Partnership to provide training to GCC Lab personnel

2019

• Strategic partnership with international R&D organization

2017

• 4 fully operational Calibration & Testing labs

• Asset company establishment

• Fully fledged IT capabilities & systems

• Operational Renewables & Smart Grid lab Phase 1

2018

• Fully operational Renewables & Smart Grid lab

2019

• Fully operational Industrial labs (Phase 1)

1. Testing, Inspection and CertificationSource: Project team

GCC Lab- Strategic Objectives

6Saudi Aramco: Public

All drivers are in support of a GCC electrical lab

Localization

incentives

for electrical

manufacturing

Focus on

efficiency and

adoption of new

technologies

Large

and growing

electricity demand

Favourable

GCC national

agendas

1 2

4 3

Strategic Drives for Establishing Testing Labs

Linked to the National agendas of GCC countries

7Saudi Aramco: Public

Localization

incentives

for electrical

manufacturing

Focus on

efficiency and

adoption of new

technologies

Large

and growing

electricity demand

Favourable

GCC national

agendas

1 2

4 3

Strategic Drives for Establishing Testing Labs

8Saudi Aramco: Public

GCC COMMON ECONOMIC DEVELOPMENT THEMES

Expanding the Productive Base

Building a Diversified Economy

Enhancing Market Efficiency

National agenda of GCC countries

Saudi Arabia

QATAR

UAE

Bahrain

Kuwait

OMAN

Strategic Drives for Establishing Testing Labs

9Saudi Aramco: Public

Localization

incentives

for electrical

manufacturing

Focus on

efficiency and

adoption of new

technologies

Large

and growing

electricity demand

Favourable

GCC national

agendas

1 2

4 3

GCC installed power capacity to grow ~55% by 2030,

Strategic Drives for Establishing Testing Lab

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GCC Installed Power Generation CapacityGigawatts, 2016-2030

Source: Business Monitor International (BMI)

Strategic Drives for Establishing Testing Labs

11Saudi Aramco: Public

Localization

incentives

for electrical

manufacturing

Focus on

efficiency and

adoption of new

technologies

Large

and growing

electricity demand

Favourable

GCC national

agendas

1 2

4 3

Focus on manufacturing localization

Strategic Drives for Establishing Testing Labs

12Saudi Aramco: Public

GCC countries localization initiatives

KSA• Saudi Vision 2030: Localize Manufacturing to 75%,

renewables, industrial equipment manufacturing

• Emiratization Initiative: Employ its citizens in a meaningful

and efficient manner in the public and private sectors

• In-Country Value (ICV) program: Maximize capital spend in

Oman for a variety of manufacturing activities

• Qatar 2030 Vision: Natural resource management and

development of knowledge based economy

• Kuwaitization Law: Increase Kuwaiti’s percentage in the

private sector to enhance knowledge transfer and localization

• Bahrainization: Bring more Bahraini citizens into the

workplace and reduce reliance on expats

UAE

Oman

Qatar

Kuwait

Bahrain

Strategic Drives for Establishing Testing Labs

13Saudi Aramco: Public

Integration of Renewable Energy & Smart grid

Localization

incentives

for electrical

manufacturing

Focus on

efficiency and

adoption of new

technologies

Large

and growing

electricity demand

Favourable

GCC national

agendas

1 2

4 3

Strategic Drives for Establishing Testing Labs

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Renewables solar targets by countryUSD billion, Gigawatts

1.Assuming a 25-30% percent drop in solar CAPEX in the short term and excluding storage costSource: Saudi 2030 vision, Sun&Life, KACARE

46GW Capacity Over $50 billion of investments by 2032

UAE3.0B$ 2020

1.5 GW

Oman0.5B$ 2015

0.2 GW

Qatar1B$ 20180.5 GW

Kuwait0.5B$ 2014

0.2 GW

KSA~50B$1 2032

41 GW

Strategic Drives for Establishing Testing Labs

15Saudi Aramco: Public

GCC Lab: Feasibility Re-Validation

Confirmation:

- Growing Business

- Competitive Advantages:

- GCC Strategies

- Strategic Partners

- Hi Demands

- New Technologies

- Specific Requirements

- Consensus

Saudi Aramco: Public

GCC Lab: Business Portfolio

GCC Lab BusinessPortfolio

PowerLabs

LV-HV, HP

RenewableSmartGrid

AppliancesEfficiencyElectronics

TrainingConsultation

AuditInspection Calibration

Capability Building

OrgEvolution

HRDevelopment

Know-How(Partners)

Demands/

SLAs

Saudi Aramco: Public

GCC Lab: Business Portfolio

GCC Lab BusinessPortfolio

PowerLabs

LV-HV, HP

RenewableSmartGrid

AppliancesEfficiencyElectronics

TrainingConsultation

AuditInspection Calibration

Testing & Certifications

Audits & Inspection

Condition Assessment

Calibration Svcs

Safety & Efficiency

Investigation & RCA

Stds Development

R&D

Demands/

SLAs

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Cyclic Peaks

Elect. Stress

Mech. Failures

Thermal Stress

Hi Creepage

Corrosion

Fire

Temperature Range

(-20 up to +60)

Humidity

100%

Corrosion

US $2.5Trillion, 3.4% Global GDP

Dust, UV, Storms, Hail,

Gusty & sandy (160kM/hr)

Source: Project team

Implication

Opportunity : GCC Climate

Derating

Shorter Life-Cycle

Replacement

Production Interruptions

Costly O&M

Safety

Performance

GCC Aggressive Environment

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• Heat spot on a noticeable number of the PV panels.

• Signs of burns ( totally / Partially damages) on multiple PV panels.

• Shuttered PV panels (Cracks on the glass layer )

• Grounding

Collaboration for Ren. Standards

- Create Climate-Specific Standards- Design Qualification & Type Testing

- Safety Qualification

- Protect Investments

- Ensure Reliability of Supply

- Hi Efficiency & Low Cost

Opportunity: Solar PV Standardization

Saudi Aramco: Public

Opportunity: Life-Cycle Performance

Source: IEA PVPS Task 13, External final report IEA-PVPS, March 2014, ISBN

LID – light-induced degradation, PID – potential induced degradation, EVA –

ethylene vinyl acetate, j-box – junction box.

Saudi Aramco: Public

Opportunity: Life-Cycle Performance

Certified Design

Quality Manufacturing

Inspection & Audits

Monitor Performance

Life-cycle Labs Service

Analyze & Share

Saudi Aramco: Public

US: $ 119 Bn/Year

EPRI

US: $ 79 Bn/Year

Berkeley Lab

Opportunity : Reliability

Cost of Interruptions

Intermittent

Uncertain

Non-Dispatchable

Non-Fragment

Saudi Aramco: Public

Opportunity : Build Capabilities

Academies & Training

International Partnering

Certification & Recertification

Qualifications of Contractors

Saudi Aramco: Public

Opportunity: Enrich Experience

Collect Data

Share Experiences

Establish Tech Committees

Share Lessons Learned

Grow Together

Support R & D

Saudi Aramco: Public

• Synergy with Visions of the GCC Countries

• Mitigate Challenges (Safety, Quality, Reliability & Cost)

• Create Centers of Excellence (Asset Management, Spare Parts, Retrofit Condition Assessment)

• Influence Technical Specifications (Life-Cycle Control, Climate)

• R&D and Innovation (Conventional, New Technologies)

• Collaboration with ALL

Remarks

Saudi Aramco: Public

THANKS