Sea-water reverse osmosis (SWRO) - the basics

March, 2012

1

Seven Seas Water CorporationBahamas-BVI-Florida-Mexico-Netherlands Antilles-Trinidad & Tobago-TCI-USVI

Seven Seas Water

AgendaAgenda

1. Sea-water reverse osmosis; the basics

2. Water Quality

3. The importance of pre-treatment

4. Texas SWRO development

5. BOO(T) form of contract; fast-track to implementation

PROPRIETARY & CONFIDENTIAL 2

p

Seven Seas WaterOverview of SSWOverview of SSW

• Currently own and operate 9 facilities with a total production of 10Currently own and operate 9 facilities with a total production of 10 MGD in the Caribbean

• By end of 2012, will have increased to 12 facilities with a total production of 24 MGD

• Will be the sole provider of potable water in the USVI at 9.5 MGD

• All projects have been executed under the BOO(T) form of contract

• Have invested $100m to date, with no debt

• Now expanding into markets in Chile, Mexico, & the USA


Seven Seas Water

1 Sea water reverse osmosis (SWRO)1. Sea-water reverse osmosis (SWRO) - the basics


Seven Seas WaterSWRO By the numbersSWRO – By the numbers

• Total number of operational SWRO plants worldwide: >6 000Total number of operational SWRO plants worldwide: >6,000

• Total production: >11,000 MGD (>12,000,000 acre-feet/year)– At 100gpd average consumption2, sufficient to supply 100 gp g p , pp y

million persons per day

• Total number of operational sea-water RO plants in the USA: >70

• Total production: >100 MGD (>125,000 acre-feet/year)– At 100gpd average consumption2, sufficient to supply 1 million

persons per day (population of Texas is 26 million)persons per day (population of Texas is 26 million)

1 d ld t


• 1.desaldata.com

• 2.dshs.state.tx.us

Seven Seas WaterSWRO PictorialSWRO - Pictorial


Seven Seas WaterSWRO Schematic (pressure)SWRO – Schematic (pressure)

• Typical schematicTypical schematic

Pressure: 750-1000psi


Seven Seas WaterSWRO Membrane constructionSWRO – Membrane construction

• Membrane constructionMembrane construction


Seven Seas WaterSWRO Schematic (PX)SWRO – Schematic (PX)


Pressure: 750-1000psi Low pressure potable water

High pressure brine

High pressure feed water

Low pressure brineLow pressure

feed water


feed water

Seven Seas WaterSWRO Energy recoverySWRO – Energy recovery


Seven Seas Water

2 Water Quality2. Water Quality


Seven Seas WaterSWRO Feed waterSWRO – Feed water

• Typical feed (sea water) water quality parametersTypical feed (sea water) water quality parameters

Parameter Typical SW Feed, mg/LDissolved Solids TDS 35,000

S d d S lid TSS 10 0Suspended Solids TSS 10.0 Turbidity NTU 5.0

pH 8.2 Chlorine 0.0 Hardness 1,702

Bicarbonate HCO3 110 C b t CO3 20Carbonate CO3 20 Flouride F 1.3 Chloride Cl 19,400 Bromide Br 67 Sulfate SO4 2,700 Lithium Li 0 S di N 10 800Sodium Na 10,800

Potassium K 398 Magnesium Mg 1,290

Calcium Ca 412 Iron Fe 0.0

Strontium Sr 7.9 Barium Ba 0 0


Barium Ba 0.0 Silica SiO2 5.0 Boron B 4.5

Seven Seas WaterSWRO Post pretreatmentSWRO – Post pretreatment

• Typical post-pretreatment water quality parametersTypical post-pretreatment water quality parameters

Parameter Typical SW Feed, mg/LTypical Pretreatment

Effluent, mg/LDissolved Solids TDS 35,000 35,000

S d d S lid TSS 10 0 2 0Suspended Solids TSS 10.0 2.0 Turbidity NTU 5.0 1.0

pH 8.2 8.2 Chlorine 0.0 0.0 Hardness 1,702 1,702

Bicarbonate HCO3 110 110 C b t CO3 20 20Carbonate CO3 20 20 Flouride F 1.3 1.3 Chloride Cl 19,400 19,400 Bromide Br 67 67 Sulfate SO4 2,700 2,700 Lithium Li 0 0 S di N 10 800 10 800Sodium Na 10,800 10,800

Potassium K 398 398 Magnesium Mg 1,290 1,290

Calcium Ca 412 412 Iron Fe 0.0 0.0

Strontium Sr 7.9 7.9 Barium Ba 0 0 0 0


Barium Ba 0.0 0.0 Silica SiO2 5.0 5.0 Boron B 4.5 4.5

Seven Seas WaterSWRO Post pretreatmentSWRO – Post pretreatment

10 0Effect of Pretreatment on WQ Parameters

8.0 9.0

10.0 (SDI<3)

5.0 6.0 7.0

ppm Sea water

2 03.0 4.0

p Pre-treatment effluent

0.0 1.0 2.0

Suspended Solids Turbidity


Suspended Solids Turbidity

Parameter

Seven Seas WaterSWRO PermeateSWRO - Permeate

• Typical permeate water quality parametersTypical permeate water quality parameters

ParameterTypical Pretreatment

Effluent, mg/LTypical Permeate

Effluent, mg/LDissolved Solids TDS 35,000 350

S d d S lid TSS 2 0 0Suspended Solids TSS 2.0 0 Turbidity NTU 1.0 <0.1

pH 8.2 6.2 Chlorine 0.0 0.0 Hardness 1,702 17

Bicarbonate HCO3 110 1 C b t CO3 20 0Carbonate CO3 20 0 Flouride F 1.3 0 Chloride Cl 19,400 194 Bromide Br 67 1 Sulfate SO4 2,700 27 Lithium Li 0 0 S di N 10 800 108Sodium Na 10,800 108

Potassium K 398 4 Magnesium Mg 1,290 13

Calcium Ca 412 4.12 Iron Fe 0.0 0.0





2 0 Effect of Membranes on WQ Parameters

1.6 1.8 2.0

1.0 1.2 1.4

pm Pre-treatment effluent

0 40.6 0.8

p Permeate

0.0 0.2 0.4

S d d S lid T bidit


Suspended Solids TurbidityParameter


35 000 Effect of Membranes on WQ Parameters

25 000

30,000

35,000 Effect of Membranes on WQ Parameters

15 000

20,000

25,000

ppm

Pre-treatment effluent

10,000

15,000 p Pre treatment effluentPermeate

0

5,000

Dissolved Chloride Sodium


Solids

Parameter

Seven Seas WaterSWRO Post treatmentSWRO – Post-treatment

• Typical post-treatment water quality parameters (potable)Typical post-treatment water quality parameters (potable)

ParameterTypical Permeate

Effluent, mg/LTypical Post Treatment

Effluent, mg/LDissolved Solids TDS 350 410

S d d S lid TSS 0 0Suspended Solids TSS 0 0 Turbidity NTU <0.1 <0.1

pH 6.2 7.2 Chlorine 0.0 2 Hardness 17 37

Bicarbonate HCO3 1 40 C b t CO3 0 0Carbonate CO3 0 0 Flouride F 0 0 Chloride Cl 194 194 Bromide Br 1 1 Sulfate SO4 27 27 Lithium Li 0 0 S di N 108 108Sodium Na 108 108

Potassium K 4 4 Magnesium Mg 13 13

Calcium Ca 4.12 24 Iron Fe 0.0 0.0




Seven Seas WaterSWRO Post treatmentSWRO – Post treatment

40 Post-treatment WQ Parameters

30

35

0 Post treatment WQ Parameters

20

25

ppm

Permeate

10

15

p

Post treatment potable

0

5


Hardness Bicarbonate CalciumParameter

Seven Seas WaterSWRO BrineSWRO – Brine

• Comparison: Feed water - BrineComparison: Feed water - Brine

Parameter Typical SW Feed, mg/L Typical Brine, mg/LDissolved Solids TDS 35,000 58,100

S d d S lid TSS 10 0 15Suspended Solids TSS 10.0 15 Turbidity NTU 5.0 8


Bicarbonate HCO3 110 183 Carbonate CO3 20 33Carbonate CO3 20 33 Flouride F 1.3 2 Chloride Cl 19,400 32,204 Bromide Br 67 111 Sulfate SO4 2,700 4,482 Lithium Li 0 0 Sodium Na 10 800 17 928Sodium Na 10,800 17,928



Strontium Sr 7.9 13.1 Barium Ba 0 0 0.0



Seven Seas WaterSWRO BrineSWRO – Brine

60,000 Comparison of Feed Sea Water to Brine

50,000

30,000

40,000

ppm

Sea water

10 000

20,000 Brine

0

10,000

Dissolved Chloride Sodium


SolidsParameter

Seven Seas Water

3 The Importance of Pre treatment3. The Importance of Pre-treatment


Seven Seas WaterSWRO Pre treatmentSWRO – Pre-treatment


Critical water quality


Seven Seas WaterSWRO Pretreatment effect on TSSSWRO – Pretreatment effect on TSS

• Typical post-pretreatment water quality parametersTypical post-pretreatment water quality parameters

Parameter Typical SW Feed, mg/LTypical Pretreatment

Effluent, mg/LDissolved Solids TDS 35,000 35,000

S d d S lid TSS 10 0 2 0Suspended Solids TSS 10.0 2.0 Turbidity NTU 5.0 1.0


Bicarbonate HCO3 110 110 C b t CO3 20 20Carbonate CO3 20 20 Flouride F 1.3 1.3 Chloride Cl 19,400 19,400 Bromide Br 67 67 Sulfate SO4 2,700 2,700 Lithium Li 0 0 S di N 10 800 10 800Sodium Na 10,800 10,800






Seven Seas WaterSWRO PretreatmentSWRO - Pretreatment

• Pretreatment design is critical to the operation and efficiency ofPretreatment design is critical to the operation and efficiency of the sea-water reverse osmosis (desalting) process

• The primary aim of pretreatment is to is to lower the Total Suspended Solids (TSS) and Biological Constituents

• The target is to achieve a Silt Density Index (SDI-15) <3

• Typical pretreatment for sea water includes the following:– MF or UF or dual-stage multi-media filtration

Coagulation & flocculation (less common)– Coagulation & flocculation (less common)


Seven Seas WaterSWRO Pretreatment schematicSWRO – Pretreatment schematic

F d tFeed water

Media FilterLow pressure pump Media Filter (1o filtration)

Low pressure pump

Cartridge Filter (2o filtration)

High pressure pump

to Membranes

High pressure pump


Seven Seas WaterSWRO Pretreatment pictorialSWRO – Pretreatment pictorial


Seven Seas Water

4 Texas SWRO Development4. Texas SWRO Development


Seven Seas WaterSWRO By the numbersSWRO – By the numbers

• Total number of operational SWRO plants worldwide: >6 000Total number of operational SWRO plants worldwide: >6,000

• Total production: >11,000 MGD (>12,000,000 acre-foot/year)– At 100gpd average consumption2, sufficient to supply 100 gp g p , pp y

million persons per day

• Total number of operational sea-water RO plants in the USA: >70

• Total production: >100 MGD (>125,000 acre-foot/year)– At 100gpd average consumption2, sufficient to supply 1 million

persons per day (population of Texas is 26 million)persons per day (population of Texas is 26 million)

1 d ld t


• 1.desaldata.com

• 2.dshs.state.tx.us

Seven Seas WaterTexas TCEQTexas – TCEQ

• In Texas SWRO is considered ‘an innovative technology’In Texas, SWRO is considered an innovative technology

• A pilot study is mandated via TCEQ staff guidance documents

Th TCEQ il t t d id i d t il d & i ti• The TCEQ pilot study guidance is very detailed & prescriptive compared to a more performance-based approach elsewhere

• The pilot study process is time consuming:The pilot study process is time consuming:– Protocol to be developed & approved– Pilot plant construction & commissioning

At l t 3 th ti– At least 3 months operations– Pilot report developed & submitted for TCEQ approval (9-12

months)


• Can be a 1-2 year period to complete the pilot study process

Seven Seas WaterPilot studiesPilot studies

• Typically Pilot studies are executed for the following reason:Typically, Pilot studies are executed for the following reason:– To ensure that the pretreatment will operate effectively &

efficiently

• It appears that the TCEQ approach is based on protecting public health & safety, and the tax-payer, by ensuring a functional SWRO facility with optimal Capex and Opex selection


Seven Seas WaterTexas Pilot study needTexas – Pilot study need

• Typically pilot studies are not required for SWRO facilitiesTypically, pilot studies are not required for SWRO facilities

• Of the 12 SSW SWRO facilities, no pilot study was executed

If th t d it i d t l i ti i th f d t• If they are executed, it is due to large variations in the feed water quality, e.g. a pilot study was executed for the Point Lisas facility in Trinidad, which experiences large fluctuations in turbidity in the feed water ranging from 1 100 NTUfeed water ranging from 1-100 NTU

• If required, pilot studies are often executed while the construction of the remainder of the facility is ongoing, i.e. the pilot study is y g g, p yexecuted by the same company responsible for the design & construction of the facility


Seven Seas WaterTexas Pilot study implicationTexas – Pilot study implication

• The mandated pilot study process will take 1-2 yearsThe mandated pilot study process will take 1-2 years

• Permitting/licensing to take 12-18 months

C t ti t t k 15 th• Construction to take 15 months

• Total time from start of the pilot study process to the facility commissioning can easily be around 48 monthscommissioning can easily be around 48 months



• Consider the 48 months from start of pilot study to start ofConsider the 48 months from start of pilot study to start of operations

• The current Texas regulations dictate that the full-scale plant must use the same process, membranes, etc. as the pilot study– During the last 36-48 months, RO membrane pressure has

reduced from a typical 870psi to 735psi– At the same time, square footage has increased from a typical

370ft2 to 440ft2 per element– By dictating that the full-scale plant must be the same as the y g p

pilot study, the resulting ‘new’ plant will be outdated, inefficient, & unable to easily adopt improvements in the technology


Seven Seas WaterSWRO executed pilot studiesSWRO – executed pilot studies

• 2 SWRO pilot studies executed in Texas:2 SWRO pilot studies executed in Texas:– LMWD completed in August 2010– Brownsville PUB completed in October 2008

N ith h b b itt d t TCEQ f l– Neither has been submitted to TCEQ for approval– The advances in membrane technology since the execution of

these studies has been significant– Having to stick with the same process and materials of the

prescriptive pilot study will assure an out-of-date full-scale facility

– ???: Does this mean that as and when the projects are to proceed, there a need for a second pilot study?



• If the purpose of the pilot study is to ensure the optimal operationsIf the purpose of the pilot study is to ensure the optimal operations of the full-scale facility, & in the process protect the tax-payer & public health & safety, the current regimen will not produce the desired result

• What if the investment is made by the private sector?• What if the investment is made by the private sector?– Still have to ensure optimum life-cycle solution (price)– Still have to ensure public health & safety– Performance will be the sole critical metric


Seven Seas Water

5 BOO(T) form of contract; fast track5. BOO(T) form of contract; fast-track to project implementation


Seven Seas WaterSWRO D&C project executionSWRO – D&C project execution

• Typical D&C processTypical D&C process– RFP for pilot plant– RFP for engineering firm to design SWRO facility

Li it d h i il bl (i l d itti )• Limited choice available (includes permitting)– RFP for construction company to build SWRO facility based

on design– What to do about O&M?

• Find qualified operators & execute internally?– No strong position with supply chaing y

• O&M contract to 3rd party? – another RFP

• Where does the accountability lie?


• This IS a specialized field

Seven Seas WaterSWRO P3 legislationSWRO – P3 legislation

• S B 1048 P3 legislation came into effect on September 1 2011S.B. 1048 P3 legislation came into effect on September 1, 2011

• Specifically references ‘water supply facility’

BOO(T) f f t t it th P3 P bli P i t P t hi• BOO(T) form of contract suits the P3 – Public Private Partnership - approach√ Finance the project√ Reduce time for implementation by executing pilot study,

permitting, & final design concurrently√ Eliminate design risk (for client)√ Eliminate construction risk (for client)√ Eliminate operations & maintenance risk (for client)√ Client only pays when SWRO facility is producing


√ Client only pays when SWRO facility is producing contractual quantity & quality

Seven Seas WaterSWRO P3 legislationSWRO – P3 legislation

• The primary purpose of the P3 approach is the optimal transfer ofThe primary purpose of the P3 approach is the optimal transfer of public sector risk (that would be involved in a traditional project) to the private sector


Seven Seas Water

SummarySummary


Seven Seas WaterSWRO SummarySWRO – Summary

• SWRO is an established technology albeit specializedSWRO is an established technology, albeit specialized

• A need in Texas for SWRO

N P3 l i l ti ll BOO(T) f f t t f SWRO• New P3 legislation allows BOO(T)–form of contract for SWRO facilities

• BOO(T) approach will significantly shorten the project executionBOO(T) approach will significantly shorten the project execution time (pilot study – permitting – design – build – commissioning)

• Economically-viable approach in Texas, even when considering the municipal bond market & other available financial instruments

• Will provide comfort to Board/Municipality/District that tax-payer risk has been minimized


payer risk has been minimized

March, 2012

43

Seven Seas Water CorporationBahamas-BVI-Florida-Mexico-Netherlands Antilles-Trinidad & Tobago-TCI-USVI

Sea-water reverse osmosis (SWRO) - the basics

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