Business Reporter -
MUSCAT, MARCH 17 -
A burgeoning outbreak of Red Tide — massive blooms of microscopic organisms of phytoplankton in seawater — has disrupted water production at the Barka II desalination plant of SMN Power Holding SAOG, the company said in a filing with the Capital Market Authority (CMA) on Thursday.
Water production at the facility has been impacted by the phenomenon since February this year. “In the short term, Barka II can only monitor the pollution levels closely and increase chemical dosing to the maximum in order to restart the plant once levels are acceptable. In the long term, the Company will study the option to invest in technical solutions to partly mitigate such re-occurrence in the future,” it stated.
Financial losses to the company as a result of the Red Tide related disruption amounts to RO 330K to date, the company said. It further explained: “This is a case of Force Majeure as per the PWPA agreement meaning OPWP will not pay the part of water capacity fees equal to the loss of production during the Force Majeure but no additional penalty will apply. However, in 2024, the PWPA will be extended for an amount of time equivalent to the loss of production and hence any losses occurred on this account will be recovered over the long term.”
SMN Power also announced that its Gas Turbine 1 suffered some damage in an unrelated mishap that occurred during the annual performance
test carried out when the unit completed the test on gas and shifted to fuel oil.
The fact finding revealed that the gas distribution spider was damaged and repair parts have been ordered. Based on the planned repair schedule, the unit should be back in service on March 25, 2018 resulting in a forced outage of 18 days with an estimated financial impact of RO 425,000, it noted.
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