Advisers sought for Oman’s first coal-fired power project

Groundbreaking: Bids open for financial and commercial advisory services

Conrad Prabhu –
Marking a dramatic shift from the power sector’s longstanding reliance on natural gas for electricity generation and associated water desalination, the Sultanate’s principal power procurement agency yesterday unveiled plans for Oman’s first coal-fired Independent Power Project (IPP).
Oman Power and Water Procurement Co (OPWP), a subsidiary of the wholly government owned Nama Group, issued a Request for Proposals (RfP) inviting qualified international consultants to bid for its contract to provide Financial & Commercial Advisory Services linked to the development of the coal-based IPP against a competitive tender.
According to industry experts, the selected consultant (or consortium of consultants) will advise OPWP on the scope and capacity of the proposed IPP, as well as on other related environmental and regulatory considerations.
A likely location for the establishment of the proposed plant is the Special Economic Zone (SEZ) at Duqm on Oman’s Wusta coast where Port of Duqm has confirmed that it is weighing dedicated coal berths designed to handle imports both for potential domestic consumption and transshipment.
The move comes against a backdrop of developments and initiatives espousing a shift from predominantly gas-based power generation to a mix of fuel resources. Given the competing demands for natural gas from industry and petrochemicals, the Ministry of Oil & Gas announced last week that gas allocations for future power projects (understood to apply to schemes planned for implementation beyond the 2022 timeframe) will be “capped” in an effort to encourage a shift to alternative fuel resources.
Tanfeedh, the National Programme for Enhancing Economic Diversification, has also mooted a stronger uptake of renewable and non-renewable energy sources, notably coal and petcoke, as potential fuel resources. Among its 120-odd proposals for accelerating economic growth in the face of the
global economic crunch is an initiative for the development of a 500MW capacity coal-fired power plant in Duqm.
Significantly, coal is one of many energy sources that the Omani government is looking at as part of a long-range Strategic National Energy Policy covering the period through to 2040. As natural gas is a finite resource, the government is keen to see a diverse fuel mix contributing to the nation’s energy needs, going forward, it is stressed.
The revival of coal as an energy resource comes nearly six years after the government scrapped a proposal for the establishment of the Sultanate’s first coal-based Independent Water and Power Project (IWPP) at Duqm. That decision was prompted by environmental concerns.
But with the advent and advancement of clean coal technologies, coupled with carbon capture and sequestration, coal is being increasingly seen an alternative to natural gas and other fossil-fuels for energy generation.