Oman's First Coal-Fired Power Plant On Track

Oman's first coal-fired power plant has made significant progress with the awarding of the technical and financial advisory contracts. The Duqm Independent Water and Power Project (IWPP) will be the first coal-fired power plant in the country, and one of the first in the Gulf region, where a somewhat surprising number of coal-fired power plants are in the pipeline.

The technical advisory contract has been awarded to Australia's WorleyParsons and the financial advisory contract has gone to KPMG. The agreements signify progress for the project, with an official from the Pubic Authority for Electricity and Water noting that 'the two contracts mean that we are going ahead with Oman's first coal-fired power plant at Duqm', as cited by Reuters.

The Duqm IWPP will have a generating capacity of 1,000MW and is estimated to cost US$2bn to build. The Oman Power and Water Procurement Company (PWP) is planning to issue requests for proposals (RfP) in Q210, with the contract due to be awarded in Q410. The IWPP is due to come online in 2015.

Oman is currently investing heavily in utilities infrastructure in order to meet growing demand for electricity and water, which is placing a strain on existing capacity. In August 2009, the chairperson of the Authority for Electricity and Water of Oman, Mohammed bin Abdullah al Mahrouqi, stated that the country will invest OMR3bn (US$7.79bn) over the next six years in power and water projects. Oman is currently developing five IWPPs. In the pipeline are the Barka III and the Sohar II, both of which will have a 1,000MW capacity. The PWP has issued RfPs for both projects, which are due to be completed in 2012. The Salalah IWPP is also being developed, and the contract had been conditionally awarded to Sembcorp. However, owing to difficulties in acquiring financing, in May 2009 PWP asked bidders to revalidate bids, effectively nullifying Sembcrop's position as the preferred bidder. Finally, there are plans to upgrade Al Ghubrah IWPP, adding 500MW of electricity generating capacity.

Of the five IWPPs that are being developed in Oman, only the Duqm IWPP is envisaged as a coal-fired plant. The motivation for bringing coal into the country's power mix has been attributed to the rising price of gas as well as an attempt to reduce domestic consumption of gas for the electricity sector, the most likely reason being to conserve more for export. In addition, the country is trying to diversify its power mix, which is currently powered two-thirds by gas and a third by oil, according to the EIA.

Coal-fired power plants are being considered by a number of Gulf countries in order to meet growing demand for electricity quickly and economically. This is a more commercially viable option, as the countries can export the more lucrative oil and gas and buy cheaper coal. Ajman, in the UAE, is likely to have the first coal-fired power plant in the region. The emirate signed a US$2bn contract with Malaysia's MMC in July 2008 for a 1,000MW power plant, which is due to be completed in 2012. Ras Al Khaimah is also in contention for the first coal power plant, announcing in March 2009 that it was planning to build a power plant that would be completed in two years' time. The emirate has also signed a contract in Indonesia to build a railway and a jetty to import coal for the project.

This article is tagged to:
Sector: Infrastructure, Power
Geography: Middle East, Oman

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