Muscat: Oman is powering up to cope with a population boom and rapid industrial growth by ploughing $1.5 billion into generating more electricity to serve the country's needs.
The state-owned Oman Power and Water Procurement Company (OPWP) is planning to build a mega gas-fired independent water and power project (IWPP) with an envisaged power generation capacity in the region of 3,000-3,500MW.
The proposed project, which will have a capital expenditure of $1.5 billion, will also have a desalination component for producing 50 million gallons of water per day, Ahmed Al Jahdhami, chief executive officer of OPWP told journalists on the sidelines of the Oman Construction Summit here on Monday.
The Sultanate's population, which grew to 3.85 million by mid-2013, up by 6.4 per cent over the same period of the previous year, 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.
"We are talking about a 10 per cent annual growth in demand for power, which is against 2-3 per cent in developed countries," he said.
Al Jahdhami said a request for quotation (RfQ) for building the power plant would be floated sometime in the third quarter of this year, which will be followed by a request for proposal (RfP) inviting bids from international power giants. "We have already identified two or three potential locations and now are coordinating with other government entities to finalise it," he said, adding: "Of course, this will require coordination with the power transmission firm and Oman Gas Company for minimising the investment."
Al Jahdhami also noted that the whole project might come up in a single location or it would be split into two or even more projects for locating in different places.
The desalination plant could be located in Suwaiq and the power plant could be split between Al Batinah and Ibri or another interior place.
"However, a decision is not yet taken," he said. "Part of the capacity will go on stream by 2017, while the full project will be ready by 2018," added the OPWP chief.
Elaborating on the seven-year power demand projection within the areas of main inter-connected system (MIS), he said 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.
In Salalah region (which is not connected to MIS), the average demand per annum is expected to grow by 10 per cent to 800MW by 2020.
Al Jahdhami said that the Sur IPP, which is in an advanced stage of completion, is expected to generate 2,000MW of power (in two phases), which will take the total power generation capacity of the country to 7,000MW.
He said 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.
Referring to other initiatives for enhancing power generation in different regions of the country, Al Jahdhami said an IPP with a generation capacity of 100MW is under construction in Musandam, while OPWP is planning to build the second IPP with a generation capacity of 300-400MW in Salalah.
Al Jahdhami said OPWP, which has 'A' rating from two international rating agencies, is expected to achieve a turnover of OMR550 million this year.
The three-day Oman Construction Summit was organised by International (IQPC), in association with Global Exhibitions and Conferences.