Oman extends deadline for Salalah power project

09 September 2014

New closing date is in late October

The Oman Power & Water Procurement Company (OPWP) has extended the bid submission date for the contract to develop the proposed Salalah 2 independent power project (IPP), in the southern Dhofar region of the sultanate.

OPWP has extended the bid deadline to 24 October for prequalified groups to submit proposals. The previous submission date was 30 September.

Four consortiums were prequalified to participate in the tender, however, it is understood the Marubeni consortium is no longer in the running.

The prequalified groups are:

The Salalah 2 IPP will have a capacity of between 300MW and 400MW and is scheduled for commissioning in 2018.

In July 2012, the UK’s PwC was appointed as financial adviser on the project, with the UK’s DLA Piper as a legal adviser and Germany’s Fichtner as technical adviser.

As part of the Salalah 2 IPP, the Dhofar Generating Company, currently part of the Dhofar Power Company, will be privatised and sold to the winning bidder. Electricity generated from the plant will be purchased by OPWP on a 15-year power purchase agreement (PPA).

The Salalah 2 IPP follows the commissioning of the Salalah IWPP, which began commercial operation in May 2012. The gas-fired power plant has a total generation capacity of 445MW, while its seawater desalination component has a total water production capacity of 15 million gallons a day (g/d). The Sembcorp Salalah Power & Water Company will provide power to OPWP for 15 years.

The projects are part of efforts to meet the increasing demand for power in the Salalah system, which currently has about 77,000 electricity customers.

Peak demand in Salalah in 2013 reached 420MW, an increase of 8 per cent on the 389MW peak in 2012. The full commissioning of the Salalah 2 independent water and power project (IWPP) boosted the system’s contracted capacity to 718MW from the 372MW operational in 2011.

Population growth, infrastructure development, industrial and tourism growth are expected to increase the peak demand growth for electricity in the Salalah system at an average rate of 10 per cent a year until 2020, from 420MW in 2013 to 553MW in 2020. Most of the demand, about 9 per cent, will come from non-industrial sectors.

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