O&M agreement for cement factory power plant

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Hail Cement Company (HCC), a prestigious Saudi Arabian cement manufacturer, has signed an Operation & Maintenance (O&M) agreement for their 52 MW power plant with Wärtsilä. The power plant provides electricity for HCC’s industrial and housing use.

The 52 MW power plant was built adjacent to the Hail Cement plant, about 210 kilometres from Hail City. The plant’s seven Wärtsilä 20V32 generating sets run on heavy fuel oil (HFO), with light fuel oil (LFO) as a backup fuel, and supply electricity to the factory and its residential area.

Heart of the cement factory

Hail Cement Company makes it very clear in their mission statement that they want to be the most efficient cement company in the region. The first step was to make themselves less dependent on the outside grid by building their own power plant.

“When we started this cement company and built the power plant, we did not have the skills and knowledge to operate the power plant efficiently. The HCC Management therefore decided to outsource the power plant’s Operation and Maintenance. In 2013, an O&M agreement was signed with Wärtsilä. This empowered us to focus on our core business, which is cement manufacturing,” says Engineer Fahad Alrasheedi, Plant Manager for Hail Cement Company.

An Operations & Maintenance agreement adds value to a company’s core business.

High quality is required

Wärtsilä tailored the agreement according to Hail Cement’s requirements, delivered on those requirements and even made improvements. “Our leading requirement is high quality, so that is what we demand from the O&M agreement,” says Mr Alrasheedi.

There have only been a few minor challenges to face, which the two parties have been able to solve as a result of Wärtsilä’s willingness to make improvements and through excellent communication and cooperation. “We have always managed to overcome the challenges. We have a common interest; operating the plant efficiently and reliably. We are all in the same boat so to speak.”

Mr Alrasheedi highlights the availability and reliability of the power plant and the load factor as being the most important benefits and mentions that the plant is getting more and more efficient over time. Wärtsilä has been able to fulfil the performance guarantees, which is partly why Hail Cement renewed the agreement in 2015. “Our manufacturing process is sensitive, and we always demand high reliability from the plant. It is worth mentioning that during 2016 the plant had not a single outage,” says Mr Alrasheedi.

The O&M agreement adds value

According to Mr Alrasheedi, Wärtsilä fully understands that interruptions in the supply of electricity to the cement factory will affect the relations with HCC’s customers. Therefore, the O&M team does everything they can to prevent any problems in the power plant. “Wärtsilä has a clear view of how our business works and supports us in succeeding in keeping the power plant up and running efficiently.”

Mr Alrasheedi says that he has already recommended a couple of other cement factories to sign an O&M agreement with Wärtsilä. “I recommend this especially for new plants that lack the skills and knowledge to operate a power plant in a way to get an efficient and reliable supply of electricity. It makes the start of the business easier. It costs perhaps a little more than having the in-house capability, but on the other hand, you lose so many other benefits. In my opinion, an O&M agreement adds value to a company’s core business. Your assets are taken care of, and you get the highest return on your investment,” concludes Mr Fahad Alrasheedi.

    Challenge
    • Fulfilling the customer’s need to find an experienced contractor to operate and maintain the power plant at the required output
    Solution
    • Renewing an Operations & Maintenance agreement for three years to ensure power plant availability and reliability.
    Benefits
    • Peace of mind: can fully concentrate on the core business of manufacturing cement
    • Optimised operation and guaranteed performance
    • Lifecycle cost guarantee and risk management

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