28/04/2012 08:01 AST
Construction work has commenced on Musandam Governorate’s first gas-fired power project, which is being developed by the state-owned Oman Oil Company in partnership with LG of South Korea. Early site works have kicked off at a waterfront site in Tibat in Wilayat Bukha, according to officials. The site adjoins the location of an integrated oil and gas processing plant (also known as the Musandam Gas Plant) currently under development by Oman Oil’s upstream subsidiary, Oman Oil Company Exploration and Production (OOCEP).
Development of the estimated 120 megawatts (MW) power project is being fast-tracked in parallel with the implementation of the Musandam Gas Plant, which will provide natural gas as fuel to the former. Provisional permits from the Ministry of Environment and Climate Affairs (MECA) have already been obtained, it is learnt, with Oman Oil and OOCEP working in close concert with the authorities to ensure that both projects — the power scheme and gas plant — are implemented in a timely manner, it is learnt.
In February, Oman Oil Company was given the mandate to develop Musandam’s maiden gas-fired power scheme in what was described as a ‘one-off’ exception to the competitive process governing the procurement of all new electricity generation capacity under the Sector Law.
The move, according to officials, was necessitated by a number of compelling factors, chiefly, a desire to ensure its timely execution in tandem with the Musandam Gas Plant project. Also, the modest size of the power project, and its location in a remote and rugged area of the Sultanate largely devoid of any infrastructure and resources, were seen as convincing reasons to seek a waiver of the competitive process in this particular case.
The decision to name Oman Oil as lead developer of the power project was ratified by a special committee comprising senior officials of the Tender Board, Ministry of Finance, Public Authority for Electricity and Water (PAEW), and Authority for Electricity Regulation, Oman, it is learnt.
For its part, Oman Power and Water Procurement Company (OPWP), which has the sole mandate under the Sector Law to oversee the procurement of all new power and related water desalination capacity, has been tasked with ensuring that the economics of the Musandam power project are to the satisfaction of the regulator.
As with previous Independent (Water and) Power Projects procured under the Sector Law, OPWP will also sign a long-term agreement with Oman Oil for the offtake of the Musandam project’s electricity output.
Importantly, Oman Oil is said to be working closely with all of the stakeholders in rapidly progressing the Musandam power project through to completion by end-2013, around the same time that the adjacent Musandam Gas Plant is targeted for completion as well.
OOCEP is investing around $600 million in an integrated processing plant with a capacity to treat 45 million standard cubic feet per day of gas and 20,000 barrels per day of crude oil.
Korean engineering and construction giant Hyundai has been awarded the contract to build the gas plant on an Engineering-Procurement-Construction (EPC) basis. A pipeline from the Gas Plant will supply natural gas as energy feedstock to the adjoining power plant of Oman Oil.
Oman Daily Observer
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