Kahrama, the owner and developing consortium for the country's first independent water and power project (IWPP), is in advanced negotiations with Sogex Omanover the contract for the operation and maintenance (O&M) and day-to-day management of the plant, to be located at Arzew.
Sogex, which operates Oman's Ghubrah co-generation plant, is the only private sector company in the region to have operated a multi-stage flash (MSF) plant for an extensive period - a key condition for the selected contractor (MEED 1:2:02).
Kahrama is an 80:20 venture between the foreign developer Black & Veatch (B&V)of the US and the Algerian Energy Company (AEC), an investment company which itself is a 50:50 joint venture between the state energy and power companies, Sonatrachand Sonelgaz. The negotiations with Sogex include discussions over whether the Omani company will take a 10 per cent equity stake in the plant, in which case B&V's equity participation would be reduced to 70 per cent. The O&M contract should be finalised by the end of August, a source close to the project said.
Earlier this year, Kahrama awarded the $260 million engineering, procurement and construction (EPC) contract to a Japanese consortium of Itochu Corporationand Ishikawajima-Harima Heavy Industries. At the same time, the original desalination capacity of the plant was doubled to 88,000 cubic metres a day (cm/d), utilising all the steam produced in meeting the plant's power generation capacity of 314 MW. Construction of the first 100-MW train is expected to take 25 months, with GE Power Systemsof the US providing the turbines.
Total project costs for the plant are $400 million, of which $100 million will be in the form of shareholders' equity. The majority of the $300 million debt will be provided through export credits. Financial close is expected to be reached before the end of the year.
The IWPP, which will produce much-needed water for the Oran region, received an explicit official seal of approval when President Bouteflika officiated at the 19 May groundbreaking ceremony at the designated 25-hectare site east of the GL2Z liquefaction plant at Arzew. The water will be taken by Sonatrach in a 25-year, 100 per cent take-or-pay agreement, while Sonelgaz has signed a similar agreement for the power offtake.
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