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Gulf Cooperation Council (GCC) Steam Turbine Maintenance Repair and Overhaul (MRO) Service Market
Frost & Sullivan, July 2010, Pages: 108
With upcoming investments in the Power sector and Process industries the GCC Steam Turbine MRO market is expected to have a moderate growth of 3.8 percent till the forecasted period 2013. As a result of increase in demand of power and petrochemical products there is an increase in installation of Steam turbine which directly increases the need for maintenance and regular service of Steam turbines. The region has to depend on manpower from other parts of the globe for Steam turbine service. Steam turbines, which are technically easier to service compared to Gas turbines are sometimes serviced inhouse by the end users. This results in service providers losing their revenues hence restraining the market growth.
This Frost & Sullivan research service titled Gulf Cooperation Council (GCC) Steam Turbine Maintenance Repair and Overhaul (MRO) Service Market provides a snapshot of opportunities, market trends, market estimates and market segmentation by types of turbines in GCC. In this research, Frost & Sullivan's expert analysts thoroughly examine the following: light industrial: capacity - less than 11.1 MW (15,000 hp) and heavy frame-type turbines: capacity - more than 11.2 MW (15,000 hp).
Market Overview
Modest Growth Envisaged for the GCC Steam Turbine MRO Service Market
The GCC steam turbine MRO service market will continue to grow at a moderate pace at the rate of 8 percent until 2013. The spike in demand for power and petrochemical products saw the consequent rise in installation of steam turbines. This has revved up the need for maintenance and regular service of these steam turbines. Upcoming projects in the petrochemical industries, such as the Kuwait Styrene Company and Kuwait Paraxylene Production Company, are expected to boost the market for steam turbines. The participation of major service providers will energize prospects for the turbine services market and they are investing heavily in the facilities they have established in GCC. High investments in sectors, such as oil and gas, process industries and power generation, will fuel the demand for turbine services in the near future in GCC. 'Kuwait is estimated to be the largest market both in terms of revenue and units; more than 50 percent of the turbines serviced in Kuwait were light industrial turbines, hence accounted for lesser revenue when compared to units,' notes the analyst of this research service. 'The country is expected to be a major participant even in the future with a regional share of 30 percent in revenues followed by Saudi Arabia and the UAE.' Turbines serviced in Bahrain are utility steam turbines.
Though market prospects are upbeat, there are some challenges restraining forward momentum. The region is faced with a shortage of skilled manpower for turbine services and hence, service providers are forced to recruit people from other regions, especially South Asia, South East Asia and Europe. Moreover, the localization policy of governments in the GCC has inhibited the growth of turbine service facilities in the region. Steam turbines, which are technically easier to service compared to gas turbines, are sometimes serviced in-house by end users. The establishment of central workshops by end users narrows the scope for external services. As a result, service providers suffer revenue loss and overall market growth is curtailed. 'Service providers are addressing this issue by imparting training to locals to enhance skills,' notes the analyst. 'Third party service providers are ramping up capabilities to address the service requirements of prospective clients.'
Apart from this, end users in the petrochemical and oil and gas segment are displaying a preference for OEM services and this prevents third-party service providers from foraying into these important end-user segments. Process industries opt for turbine servicing by OEMs rather than by third-party service providers for their quality service and the availability of critical spare parts. New private utility facilities are gravitating toward long-term service agreements (LTSAs) with OEMs. The cyclical nature of petrochemical business has also negatively impacted turbine services revenue. The OEM footprint is poised for expansion with the process industry sector as the main end user. Companies such as Siemens AG, Dresser-Rand, and so on present in the market are looking to tap servicing potential over the long haul.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
By Equipment Type:
- Light industrial: capacity: Less than 11.1 MW (15,000 hp)
- Heavy frame type turbines: capacity: more than 11.2 MW (15,000 hp)
By End-use Vertical:
- Power
- Oil and gas
- Process industries
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