Wed, 18 July 2012

MUSCAT -- ACWA Power Barka, which owns and operates an Independent Water and Power Project at Barka (also known as the Barka 1 IWPP), says it has won government approval for its proposal to expand its water desalination capacity by 45,000 cubic metres per day (10 million imperial gallons per day - MIGD).

In a disclosure notification to the Capital Market Authority (CMA), the company announced yesterday that it had received a 'Letter of Award' from the state-owned Oman Power and Water Procurement Company (OPWP), effectively granting it the green light to proceed with its expansion plan.

As the sole procurer of all new electricity generation and related water desalination capacity, OPWP's nod for such investments is a prerequisite under the Sector Law. This would allow for the private developer -- in this case ACWA Power Barka -- to commit all of its desalinated water output to OPWP under a long-term Water Purchase Agreement, typically in force for 15 years.

Significantly, the expansion will effectively boost the water desalination capacity of Barka 1 by around 50 per cent from the present 91,000 m3/day (20 MIGD) to around 135,000 m3/day (30 MIGD). It will also go some way in addressing a projected shortfall in water desalination capacity within the 'Interconnected Zone' over the next seven years (2012-2018).

According to the latest annual Outlook Statement of OPWP, capacity shortfalls are anticipated at specific periods when some of the desalination capacity in the Interconnected Zone - encompassing the governorates of Muscat, Batinah North and South, Buraimi, Al Dakhiliya and Al Dhahirah fall out of contract upon the expiration of existing water purchase agreements.

Barka 1, which is the Sultanate's first privately financed water desalination scheme, is itself slated to fall out of contract in April 2018 unless an extension of the offtake agreement with OPWP is granted before then. Likewise, some aging water desalination units of the Ghubrah Power and Water Desalination Plant in Muscat Governorate are also scheduled to be decommissioned and phased out, thereby compounding a potential capacity deficit.

In response to these scenarios, OPWP has embarked on a number of initiatives to address any supply crunch in the Interconnected Zone, which accounts for a dominant share of the country's desalinated water demand. One concrete solution, now in an advanced stage of development, is the procurement of a new Independent Water Project (IWP) at Ghubrah, an award for which is due to be announced in the coming months. Upon commissioning in April 2014, the IWP will add 191,000 m3/day (42 MIGD) of new water desalination capacity to the Interconnected Zone.

Additionally, OPWP is studying the potential for a pair of IWPs at Suwaiq and Qurayat that will add a further 90 MIGD of capacity to the Interconnected Zone. The Suwaiq plant is considered at about 225,000 m3/day (50 MIGD), to be in service in 2016, whereas the Qurayat plant is considered at about 180,000 m3/day (40 MIGD), to be in service in the 2018/2019 timeframe.

© Oman Daily Observer 2012