Duqm utility to develop 300MW power project

STRATEGIC: OPWP and PAEW weighing possible role for Marafiq in supplying desalinated water to Duqm Zone -

Conrad Prabhu -

MUSCAT, MAY 23 -

Marafiq, a joint venture firm set up by Takamul Investment Company (wholly owned subsidiary of Oman Oil Company) and Sembcorp Utilities of Singapore, is in the process of developing a 300 MW-capacity power project in the Special Economic Zone (SEZ) at Duqm.

The facility, according to a report by the Oman Power and Water Procurement Company (OPWP) — the sole procurer of new power and water capacity in the Sultanate — is designed to primarily meet the energy requirements of a new refinery and petrochemical complex under development at the SEZ. A partnership of Oman Oil Company (OOC) and Kuwait Petroleum International (KPI) is jointly developing the 230,000 barrels per day (bpd) greenfield refinery at a cost of around $7 billion.

Significantly, OPWP along with the Public Authority for Electricity & Water (PAEW) are currently weighing a possible role for Marafiq in the supply of both electricity and water to address part of Duqm’s projected requirements as well.

Duqm is presently served by a 66 MW diesel-fired power plant owned and operated by the Rural Areas Electricity Company (RAECO), part of Nama Group. Demand is projected at 650 MW in the first phase of the growth of the SEZ, although this is subject to a number of factors, including the current economic and investment environment.

RAECO, which is responsible for meeting the power and water needs of the Duqm Zone, is currently consulting with the Authority for Electricity Regulation (AER) on options for securing supplies to the area.

“These options include the expansion of the existing power plant, procurement of rental diesel generators, construction of a new fuel oil or gas-fired power plant, power purchase from Marafiq, and power purchase from OPWP (subject to the completion of the North-South Interconnect project, which would also provide an interconnect with the Ad Duqm demand area, through Haima),” said OPWP in its latest 7-Year Outlook Statement covering the 2017-2023 timeframe.

North-South Interconnect

The North-South Interconnect project centres on the construction of a 400 kV transmission link connecting the Main Interconnected System (MIS) serving the northern half of the Sultanate with the internal grid of Petroleum Development Oman (PDO). OPWP, along with Oman Electricity Transmission Company (OETC) — which operates the MIS system — and PDO, are currently studying the feasibility of constructing the interconnect project. When operational, tentatively by the year 2021, the interconnect project could meet part of Duqm’s energy requirements.

“Duqm could also become a location for a large power station, able to access other major load centres until large-scale demand develops locally. Once Duqm develops as a major industrial and economic centre, it will require this link to provide for grid stability and security,” OPWP commented.

Water mandate for Marafiq

Importantly, authorities are also mulling a possible role for Marafiq in the supply of desalinated water to industrial and domestic consumers in the Duqm Zone. Pending a decision on this proposal, a move by OPWP to procure a 60,000 m3/d (13.2 million imperial gallons per day — MIGD) capacity Independent Water Project (IWP) has been placed on hold, according to OPWP. The procurement process for the new Duqm IWP, as it is called, began last year.

“PAEW and (the SEZ Authority at Duqm — SEZAD) are considering a proposal to arrange for water desalination, transmission and distribution of both industrial and domestic water with Marafiq, which is currently contracted to provide utility services to the Duqm refinery and related industrial complex,” said OPWP.

The Duqm Zone is currently served by a desalination plant owned by RAECO, with capacity of 8,000 m3/d (1.7 MIGD), in addition to a number of local water sources. RAECO expects to expand the plant to produce an additional 4,000 m3/d (1 MIGD) in 2018.

PAEW is also constructing a water transmission line connecting Haima with Duqm. The project, due to be commission next year, will serve communities located along the length of the pipeline.