Presented by Richard Whiting at TWCA annual convention www.twca.org March, 2012 Seven Seas Water Corporation Bahamas-BVI-Florida-Mexico-Netherlands Antilles-Trinidad & Tobago-TCI-USVI

1. March, 2012
Seven Seas Water Corporation
Bahamas-BVI-Florida-Mexico-Netherlands Antilles-Trinidad & Tobago-TCI-USVI
1

2. Seven Seas Water
Agenda
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
p
PROPRIETARY & CONFIDENTIAL 2

3. Seven Seas Water
Overview of SSW
• Currently 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
PROPRIETARY & CONFIDENTIAL 3

4. Seven Seas Water
1. Sea-water
1 Sea water reverse osmosis (SWRO)
- the basics
PROPRIETARY & CONFIDENTIAL 4

5. Seven Seas Water
SWRO – By the numbers
• Total number of operational SWRO plants worldwide: >6 000
>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)
• 1.desaldata.com
1d ld t
• 2.dshs.state.tx.us
PROPRIETARY & CONFIDENTIAL 5

6. Seven Seas Water
SWRO - Pictorial
PROPRIETARY & CONFIDENTIAL 6

7. Seven Seas Water
SWRO – Schematic (pressure)
• Typical schematic
Pressure: 750-1000psi
PROPRIETARY & CONFIDENTIAL 7

8. Seven Seas Water
SWRO – Membrane construction
• Membrane construction
PROPRIETARY & CONFIDENTIAL 8

9. Seven Seas Water
SWRO – Schematic (PX)
• Typical schematic
Pressure: 750-1000psi Low pressure
potable water
High pressure feed water High pressure
brine
Low pressure
Low pressure
brine
feed water
PROPRIETARY & CONFIDENTIAL 9

10. Seven Seas Water
SWRO – Energy recovery
PROPRIETARY & CONFIDENTIAL 10

11. Seven Seas Water
2.
2 Water Quality
PROPRIETARY & CONFIDENTIAL 11

12. Seven Seas Water
SWRO – Feed water
• Typical feed (sea water) water quality parameters
Parameter Typical SW Feed, mg/L
Dissolved Solids TDS 35,000
Suspended Solids
S d d S lid TSS 10.0
10 0
Turbidity NTU 5.0
pH 8.2
Chlorine 0.0
Hardness 1,702
Bicarbonate HCO3 110
Carbonate
C b t CO3 20
Flouride F 1.3
Chloride Cl 19,400
Bromide Br 67
Sulfate SO4 2,700
Lithium Li 0
Sodium
S di Na
N 10,800
10 800
Potassium K 398
Magnesium Mg 1,290
Calcium Ca 412
Iron Fe 0.0
Strontium Sr 7.9
Barium Ba 0.0
00
Silica SiO2 5.0
Boron B 4.5
PROPRIETARY & CONFIDENTIAL 12

13. Seven Seas Water
SWRO – Post pretreatment
• Typical post-pretreatment water quality parameters
Typical Pretreatment
Parameter Typical SW Feed, mg/L Effluent, mg/L
Dissolved Solids TDS 35,000 35,000
Suspended Solids
S d d S lid TSS 10.0
10 0 2.0
20
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
Carbonate
C b t 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
Sodium
S di Na
N 10,800
10 800 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
00 0.0
00
Silica SiO2 5.0 5.0
Boron B 4.5 4.5
PROPRIETARY & CONFIDENTIAL 13

14. Seven Seas Water
SWRO – Post pretreatment
Effect of Pretreatment on WQ Parameters
10.0
10 0 (SDI<3)
9.0
8.0
7.0
6.0
ppm
5.0 Sea water
p
Pre-treatment effluent
4.0
3.0
2.0
20
1.0
0.0
Suspended Solids Turbidity
Parameter
PROPRIETARY & CONFIDENTIAL 14

15. Seven Seas Water
SWRO - Permeate
• Typical permeate water quality parameters
Typical Pretreatment Typical Permeate
Parameter Effluent, mg/L Effluent, mg/L
Dissolved Solids TDS 35,000 350
Suspended Solids
S d d S lid TSS 2.0
20 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
Carbonate
C b t CO3 20 0
0
Flouride F 1.3 0
Chloride Cl 19,400 194
Bromide Br 67 1
Sulfate SO4 2,700 27
Lithium Li 0 0
Sodium
S di Na
N 10,800
10 800 108
108
Potassium K 398 4
Magnesium Mg 1,290 13
Calcium Ca 412 4.12
Iron Fe 0.0 0.0
Strontium Sr 7.9 0.1
Barium Ba 0.0
00 0.0
00
Silica SiO2 5.0 0.1
Boron B 4.5 0.5
PROPRIETARY & CONFIDENTIAL 15

16. Seven Seas Water
SWRO - Permeate
2.0
20 Effect of Membranes on WQ Parameters
1.8
1.6
1.4
1.2
ppm
1.0 Pre-treatment effluent
Permeate
0.8
0.6
0.4
04
0.2
0.0
Suspended Solids
S d d S lid Turbidity
T bidit
Parameter
PROPRIETARY & CONFIDENTIAL 16

17. Seven Seas Water
SWRO - Permeate
35,000
35 000 Effect of Membranes on WQ Parameters
30,000
25,000
25 000
20,000
ppm
Pre-treatment effluent
Pre treatment
p
15,000
15 000
Permeate
10,000
5,000
0
Dissolved Chloride Sodium
Solids
Parameter
PROPRIETARY & CONFIDENTIAL 17

18. Seven Seas Water
SWRO – Post treatment
Post-treatment
• Typical post-treatment water quality parameters (potable)
Typical Permeate Typical Post Treatment
Parameter Effluent, mg/L Effluent, mg/L
Dissolved Solids TDS 350 410
Suspended Solids
S d d S lid TSS 0
0 0
0
Turbidity NTU <0.1 <0.1
pH 6.2 7.2
Chlorine 0.0 2
Hardness 17 37
Bicarbonate HCO3 1 40
Carbonate
C b t CO3 0
0 0
0
Flouride F 0 0
Chloride Cl 194 194
Bromide Br 1 1
Sulfate SO4 27 27
Lithium Li 0 0
Sodium
S di Na
N 108
108 108
108
Potassium K 4 4
Magnesium Mg 13 13
Calcium Ca 4.12 24
Iron Fe 0.0 0.0
Strontium Sr 0.1 0.1
Barium Ba 0.0
00 0.0
00
Silica SiO2 0.1 0.1
Boron B 0.5 0.5
PROPRIETARY & CONFIDENTIAL 18

19. Seven Seas Water
SWRO – Post treatment
0
40 Post treatment
Post-treatment WQ Parameters
35
30
25
ppm
20 Permeate
p
Post treatment potable
15
10
5
0
Hardness Bicarbonate Calcium
Parameter
PROPRIETARY & CONFIDENTIAL 19

20. Seven Seas Water
SWRO – Brine
• Comparison: Feed water - Brine
Parameter Typical SW Feed, mg/L Typical Brine, mg/L
Dissolved Solids TDS 35,000 58,100
Suspended Solids
S d d S lid TSS 10.0
10 0 15
15
Turbidity NTU 5.0 8
pH 8.2 8.4
Chlorine 0.0 0.0
Hardness 1,702 2,825
Bicarbonate HCO3 110 183
Carbonate CO3 20 33
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
10 800 17,928
17 928
Potassium K 398 661
Magnesium Mg 1,290 2,141
Calcium Ca 412 684
Iron Fe 0.0 0.0
Strontium Sr 7.9 13.1
Barium Ba 0.0
00 0.0
0.0
Silica SiO2 5.0 8.3
Boron B 4.5 7.2
PROPRIETARY & CONFIDENTIAL 20

21. Seven Seas Water
SWRO – Brine
60,000 Comparison of Feed Sea Water to Brine
50,000
40,000
ppm
30,000 Sea water
Brine
20,000
10,000
10 000
0
Dissolved Chloride Sodium
Solids
Parameter
PROPRIETARY & CONFIDENTIAL 21

22. Seven Seas Water
3.
3 The Importance of Pre treatment
Pre-treatment
PROPRIETARY & CONFIDENTIAL 22

23. Seven Seas Water
SWRO – Pre treatment
Pre-treatment
• Typical schematic
Critical water quality
PROPRIETARY & CONFIDENTIAL 23

24. Seven Seas Water
SWRO – Pretreatment effect on TSS
• Typical post-pretreatment water quality parameters
Typical Pretreatment
Parameter Typical SW Feed, mg/L Effluent, mg/L
Dissolved Solids TDS 35,000 35,000
Suspended Solids
S d d S lid TSS 10.0
10 0 2.0
20
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
Carbonate
C b t 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
Sodium
S di Na
N 10,800
10 800 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
00 0.0
00
Silica SiO2 5.0 5.0
Boron B 4.5 4.5
PROPRIETARY & CONFIDENTIAL 24

25. Seven Seas Water
SWRO - Pretreatment
• Pretreatment 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)
PROPRIETARY & CONFIDENTIAL 25

26. Seven Seas Water
SWRO – Pretreatment schematic
Feed
F d water
t
Low pressure pump Media Filter
(1o filtration)
Cartridge
Filter
(2o filtration)
High pressure pump
to Membranes
PROPRIETARY & CONFIDENTIAL 26

27. Seven Seas Water
SWRO – Pretreatment pictorial
PROPRIETARY & CONFIDENTIAL 27

28. Seven Seas Water
4.
4 Texas SWRO Development
PROPRIETARY & CONFIDENTIAL 28

29. Seven Seas Water
SWRO – By the numbers
• Total number of operational SWRO plants worldwide: >6 000
>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)
• 1.desaldata.com
1d ld t
• 2.dshs.state.tx.us
PROPRIETARY & CONFIDENTIAL 29

30. Seven Seas Water
Texas – TCEQ
• In Texas SWRO is considered ‘an innovative technology’
Texas, an technology
• A pilot study is mandated via TCEQ staff guidance documents
• Th TCEQ pilot study guidance is very detailed & prescriptive
The il t t d id i d t il d i ti
compared to a more performance-based approach elsewhere
• The pilot study process is time consuming:
– Protocol to be developed & approved
– Pilot plant construction & commissioning
– At least 3 months operations
l t th ti
– Pilot report developed & submitted for TCEQ approval (9-12
months)
• Can be a 1-2 year period to complete the pilot study process
PROPRIETARY & CONFIDENTIAL 30

31. Seven Seas Water
Pilot studies
• Typically Pilot studies are executed for the following reason:
Typically,
– 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
PROPRIETARY & CONFIDENTIAL 31

32. Seven Seas Water
Texas – Pilot study need
• Typically pilot studies are not required for SWRO facilities
Typically,
• Of the 12 SSW SWRO facilities, no pilot study was executed
• If th are executed, it is due to large variations in th f d water
they t d i d t l i ti i the feed t
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 NTU
1-100
• If required, pilot studies are often executed while the construction
of the remainder of the facility is ongoing, i.e. the p
y g g, pilot study is
y
executed by the same company responsible for the design &
construction of the facility
PROPRIETARY & CONFIDENTIAL 32

33. Seven Seas Water
Texas – Pilot study implication
• The mandated pilot study process will take 1-2 years
• Permitting/licensing to take 12-18 months
• C
Construction t take 15 months
t ti to t k th
• Total time from start of the pilot study process to the facility
commissioning can easily be around 48 months
PROPRIETARY & CONFIDENTIAL 33

34. Seven Seas Water
Texas – Pilot study need
• Consider 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
PROPRIETARY & CONFIDENTIAL 34

35. Seven Seas Water
SWRO – executed pilot studies
• 2 SWRO pilot studies executed in Texas:
– LMWD completed in August 2010
– Brownsville PUB completed in October 2008
– N ith h b
Neither has been submitted t TCEQ for approval
b itt d to f l
– 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?
PROPRIETARY & CONFIDENTIAL 35

36. Seven Seas Water
Texas – Pilot study need
• If 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?
– Still have to ensure optimum life-cycle solution (price)
– Still have to ensure public health & safety
– Performance will be the sole critical metric
PROPRIETARY & CONFIDENTIAL 36

37. Seven Seas Water
5.
5 BOO(T) form of contract; fast-track
fast track
to project implementation
PROPRIETARY & CONFIDENTIAL 37

38. Seven Seas Water
SWRO – D&C project execution
• Typical D&C process
– RFP for pilot plant
– RFP for engineering firm to design SWRO facility
• Li it d choice available (includes permitting)
Limited h i il bl (i l d itti )
– 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 chain
g y
• O&M contract to 3rd party? – another RFP
• Where does the accountability lie?
• This IS a specialized field
PROPRIETARY & CONFIDENTIAL 38

39. Seven Seas Water
SWRO – P3 legislation
• S B 1048 P3 legislation came into effect on September 1 2011
S.B. 1,
• Specifically references ‘water supply facility’
• BOO(T) form of contract suits the P3 – P bli P i t P t
f f t t it th Public Private Partnership
hi
- 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
contractual quantity & quality
PROPRIETARY & CONFIDENTIAL 39

40. Seven Seas Water
SWRO – P3 legislation
• The 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
PROPRIETARY & CONFIDENTIAL 40

41. Seven Seas Water
Summary
PROPRIETARY & CONFIDENTIAL 41

42. Seven Seas Water
SWRO – Summary
• SWRO is an established technology albeit specialized
technology,
• A need in Texas for SWRO
• N
New P3 l i l ti allows BOO(T) f
legislation ll BOO(T)–form of contract for SWRO
f t tf
facilities
• BOO(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
PROPRIETARY & CONFIDENTIAL 42

43. March, 2012
Seven Seas Water Corporation
Bahamas-BVI-Florida-Mexico-Netherlands Antilles-Trinidad & Tobago-TCI-USVI
43