Oman Observer

Oman-Thailand JV to set up $483m Duqm power project

Oman Oil Company (OOC), the wholly Omani government-owned energy investment vehicle, is partnering with Gulf Energy Development Public Company Limited (Gulf) — Thailand’s leading power utility — to set up a major gas-based power and water project at the Special Economic Zone (SEZ) in Duqm.
The proposed Duqm Independent Power & Water Plant Project will offer 326 megawatts (MW) of electricity generation capacity and 1,667 cubic metres/day of water desalination capacity. It will be the first gas-fired power and water project in Oman’s Al Wusta Governorate. Total investment in the project amounts to $483 million.
A partnership agreement to this effect was signed by the two sides in Bangkok, Thailand on Thursday. Oman Oil Company and Gulf Energy Development were represented by their respective CEOs Eng Isam al Zadjali and Sarath Ratanavadi at the signing.
While OOC subsidiaries will hold a 55 per cent equity interest in the newly established project company Duqm Power Company, the balance 45 per cent will be owned by the Thai utility. Representing OOC’s interests in the project company are the Centralised Utilities Company (Marafiq) [51.1 per cent] and Oman Oil Facilities Development Company (OOFDC), [3.9 per cent]. The latter entities operate under Oman Oil Company’s Infrastructure Vertical headed by Oman Gas Company (OGC) — one of four verticals created as part of the Group’s landmark restructuring exercise undertaken two years ago.
Gulf Energy Development’s overseas investment arm Gulf International Holding Company Pte Ltd (GIH) represents the parent group’s equity interest in Duqm Power Company.
Announcing the pact in a tweet, Oman Oil Company said: “This prestigious project will be the first captive power plant developed by Oman Oil’s Infrastructure Vertical. The project will also support Oman Oil’s Infrastructure Vertical strategic vision to play a key role in the development of conventional and renewable power generation in Oman. It also highlights the integration approach which Oman Oil is developing through projects that would create added value through the whole energy chain.”
In a filing with the Thai Stock Exchange, Gulf Energy Development said it had been selected as the successful investor in the Duqm project following the submission of a tender to jointly invest in Duqm Power Company.
Significantly, electricity and water output from the project has been earmarked for Duqm Refinery, which is currently under implementation at the SEZ with an investment of around $7 billion. Oman Oil Company is a 50 per cent shareholder in the 230,000 barrels per day capacity green-field refinery, with Kuwait Petroleum International (KPI) holding the balance 50 per cent.
Duqm Power Company, the owner and operator of the new power and water project, has already secured a 25-year power and water purchase agreement with Duqm Refinery, the partners stated. The project will be brought into commercial operation in three phases starting from July 2020 to May 2022 in sync with Duqm Refinery’s electricity and water consumption plan. Bangkok-headquartered Gulf Energy Development Public Company Limited (Gulf Group) is a holding company with a portfolio of electricity, steam and chilled water generating projects and other related businesses.