Oman


Initial tender floated for Oman’s biggest gas-fired power project


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Muscat: The much-awaited proposal to build the Sultanate's biggest gas-fired independent power project of 2,600 megawatt-capacity kicked off with a tender announcement seeking a request for qualification (RfQ) - an initial process to select an international developer for building the project.

The state-owned OPWP said the total power generation capacity of 2,600 megawatt is likely to come up in two locations or sites within the main interconnected system (MIS) region.

"The IPPs are to be developed as private sector projects by appropriately qualified developers," said a request for qualification notification released by OPWP here yesterday. Part of the capacity will go on stream by 2017, while the full project will be ready by 2018.

The project is for meeting the growth in demand for electricity, mostly driven by a growing population in the country.

The proposed project will have a capital expenditure of $1.5 billion, Ahmed Al Jahdhami, chief executive officer of OPWP, said earlier this year. Like any other IPP, the investment will be made by the selected international independent power producer. The natural gas required for the power project will be sold to the developer at a pre-determined price by the government, while the sole purchaser of power will be OPWP.

The Sultanate's population, which grew to four million by early 2014, is a major factor that drives the demand for electricity, while industrial consumption and tourism development projects also accelerate the growth in consumption of power in the northern region. In fact, dozens of new hotels are in different stages of planning and development in Muscat Governorate. A mid-size hotel will need 10-15 megawatt electricity, which is equivalent to 100 to 150 houses in Oman.

The RfQ will be followed by a request for proposal (RfP) inviting bids from pre-qualified international power giants. The RfQ document will be formally available for purchase from OPWP offices between June 15 and 30 and the last date of submission is August 3.

Al Jahdhami earlier said that there could be a desalination component as part of the whole scheme, which could be located in Suwaiq, while the power plant could be split between Al Batinah and Ibri.

As per the seven-year power demand projection within the areas of main inter-connected system, the average annual demand is expected to grow by 9.5 per cent to 8,106MW by 2019 in normal circumstances, while the growth could be around 7.6 per cent in 'low case' scenario and 11.4 per cent in 'high case' scenario to 7,190MW and 9,133MW, respectively, by 2019.

This is against a historical average annual growth of 10 per cent between 2007 and 2012. This is also against two to three per cent growth in power demand in developed countries.  

The private sector investment in power and water projects has touched $7 billion. Presently, there are only two government-owned power plants, which will be phased out as these are old assets.

An IPP with a generation capacity of 100MW is under construction in Musandam, while OPWP is in the process of selecting a developer for the second IPP with a generation capacity of 300-400MW in Salalah.

To get in touch: businesseditor@timesofoman.com

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