Oman pushes ahead with power and water projects

22 May 2013

Projects will provide power for industrial and residential schemes in Oman

Singapore’s Sembcorp Utilities, a subsidiary of Sembcorp Industries, has formed a joint venture with Oman’s Takamul Investment Company (Takamul) to build utilities for the Duqm Special Economic Zone (SEZ).

The contract award is the latest sign that the sultanate is serious about developing its utilities infrastructure, with the agreement following the recent commissioning of a number of major power and water projects.

The joint venture company, known as Centralised Utilities Company (CUC), will provide centralised utilities such as power, steam, water, sewage treatment and logistics facilities. CUC will have an initial share capacity of RO1m ($3.2m). The joint-venture agreement was signed on 19 May in Muscat.

Takamul holds 65 per cent of shares in the joint venture, while Sembcorp holds the remaining 35 per cent. Takamul is a subsidiary of the state-backed Oman Oil Company.

Duqm SEZ has a total land area of 1,777 square kilometres and an 80-kilometre coastline. The development of SEZ is scheduled to be completed over three phases until 2025. The project will form a key part of Oman’s efforts to diversify its economy in the coming years.

“Oman wants to accommodate industrialisation to broaden the economy, add value to the economy and create jobs for its people. The Duqm project is a good example of this,” Tan Cheng Guan, executive vice-president and head, group business development and commercial at Sembcorp Industries, told MEED.

The Duqm scheme is the second major project Sembcorp has undertaken in the sultanate. Also on 19 May, the Singaporean firm officially opened the Salalah independent water and power project (IWPP) in the southern governorate of Dhofar.

The Salalah IWPP began commercial operation in May 2012. The gas-fired power plant has a total generation capacity of 490MW, while its seawater desalination component has a total water production capacity of 15 million gallons a day (g/d). The Singaporean developer will provide power to the Oman Power and Water Procurement Company (OPWP) for 15 years.

OPWP is also planning to build an independent power project (IPP), Salalah 2, to further boost generation capacity in southern areas of Oman. The project is expected to have a capacity of 230-400MW and is due to be commissioned in 2016.

The projects are part of the sultanate’s efforts to boost generation capacity and reduce power shortages, which blighted the country in 2011.

In April this year, the Al-Batinah Power Company and the Al-Suwadi Power Company began commercial operation of the Sohar 2 and Barka 3 power plants. The two plants will contribute a total 1,500MW of capacity to the sultanate’s northern grid system.

Both the Al-Batinah and Al-Suwadi power companies are owned by a consortium comprising UK/France’s GDF Suez, which holds 46 per cent, and the local Multitech, part of Suhail Bahwan Group, which holds 22 per cent. The consortium also contains Japanese firms Sojitz Corporation and Shikoku Electric Power Company, each of which holds 11 per cent, and the Public Authority for Social Insurance (PASI) of Oman, which holds the remaining 10 per cent.

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