By Conrad Prabhu -
MUSCAT — Global professional services firm PricewaterhouseCoopers (PwC) has won a contract to provide financial advisory services to Oman Power and Water Procurement (OPWP) in the implementation of a new Independent Power Project (IPP) planned in Salalah.
The state-owned power and water offtaker, which has the sole mandate under the sector law to procure all new electricity generation and water desalination capacity, has also named international engineering and consultancy services firm Fichtner as the Technical Adviser. Multinational law firm DLA Piper has been awarded the Legal Advisory Services Contract.
With PwC as Financial Adviser, the three firms will advise OPWP on an international competitive process leading to the development of the second privately funded power project in Dhofar Governorate. It comes close on the heels of the recent commissioning of the governorate’s first Independent Water and Power Project (IWPP), set up at Taqah near Salalah with an investment of around $1 billion.
OPWP has zeroed in on Raysut, with its world-scale transshipment and logistics hub, as well as its expanding free zone and industrial estate, as its choice of location for the establishment of the new power plant. The gas-fired project is currently envisioned as a power-only scheme sized in the range of 200-400 megawatts of generation capacity. However, the potential water component is still under review, it is learnt.
Electricity demand in Salalah and its environs is projected to soar in the coming years, fuelled by investment in new infrastructure, tourism and leisure schemes, shopping malls, commercial centres, and general real estate development.
Large scale investment in a modernised international airport, the expansion of Salalah Port, new industrial ventures in the adjoining Free Zone, and integrated tourism complexes, is expected to drive up power demand. Peak power demand in the Salalah System is anticipated to grow by 10 per cent annually from 348 MW in 2011 to 690 MW in 2018, says OPWP. In the low-case scenario, demand growth is expected to be sustained at 7 per cent, reaching 571 MW by 2018.
But the high-case scenario considers more rapid industrialisation in Salalah, with peak demand projected to jump 17 per cent annually to 1041 MW in 2018.
Water demand growth in the Salalah area will be substantially met by the newly operational IWPP of Sembcorp Salalah Power and Water Company at Taqah. The IWPP consists of a gas-fired power plant with a total gross capacity of 490 megawatts and a seawater desalination plant with a total water production capacity of 15 million imperial gallons (69,000 cubic metres) per day.
With the appointment of advisers for the new power scheme at Raysut, OPWP will now be working towards its next project milestone — the issuance of a Request for Qualifications (RfQ) from interested developers and investors — slated for September 2012. This will be followed by a Request for Proposals (RfP) in December. A contract award is likely before the end of 2013, with project completion slated for 2016.