02 April 2012
MUSCAT -- Gas consumption by the country's expanding network of electricity generation and water desalination plants is forecasted to jump a hefty 36.6 per cent over the next seven years, according to the Oman Power and Water Procurement Company (OPWP).
Announcing the projections in its latest 7-year outlook for the power and water sector, the state-owned offtaker said total gas consumption by the nation's critical energy sector is poised to jump from 6.0 billion standard cubic metres (Sm3) in 2011 to 8.2 billion Sm3 in 2018.
Oman's electricity output is almost entirely based on the use of natural gas as a fuel. Gas consumption within the Main Interconnected System (MIS) covering north Oman is projected to grow at an average rate of 5 per cent per year, which is lower than the expected growth in electricity demand of about 8 per cent per year.
OPWP has attributed the lower growth rate in gas consumption to the utilisation of fuel-efficient gas turbine technology, which is a feature of a string of new plants under development at Sur, Barka (Phase 3) and Sohar (Phase 2).
In line with a longstanding policy that accords priority supply to the electricity sector, the Ministry of Oil and Gas has pledged allocations of the required volumes of natural gas for the power and associated water sector over the medium term. These volumes, says OPWP, would be sufficient to cover the projected requirements through 2018 under the low-case scenario, which envisions an average growth rate in peak energy demand of 8 per cent in 2018.
However, the committed gas volumes are deemed adequate to cover fuel demand only through 2016 under the expected demand scenario, and through 2015 under the high-case scenario. The latter scenario envisions an 11 per cent increase in annual electricity demand.
"Additional overall quantities, and supplies to new projects, remain subject to future Ministry of Oil and Gas confirmation, though the ministry has indicated that the power and water sector, is as a matter of government policy, to be given a high priority in future gas allocation," OPWP said in its Outlook Statement.
The offtaker nevertheless outlined several initiatives it said it would likely need to take to help secure the power sector's additional fuel requirements in the future. One such measure would be to discuss with the government the feasibility of importing gas specifically for use in power generation (and associated water production).
Another measure is to consider invoking provisions in the Power Purchase Agreements concluded with the Barka 3 and Sohar 2 power projects for the optional use of diesel instead of gas as a fuel.
Yet another option is to bring forwards plans for the procurement of new generation capacity based on a fuel other than gas, possibly starting with new capacity potentially required in 2017, OPWP stated. In the Salalah System, which covers much of Dhofar Governorate, overall fuel consumption is expected to rise at an average rate of about 4 per cent annually, which is substantially lower than the expected growth rate in electricity demand of about 11 per cent annually.
The lower growth rate in fuel consumption relative to power demand is attributable to the launch of the new Salalah Independent Water and Power Project (IWPP) at Taqah. The gas-based plant, along with future projects planned in Dhofar, will make a significant contribution to fuel efficiency within the System, OPWP added.
MUSCAT -- Gas consumption by the country's expanding network of electricity generation and water desalination plants is forecasted to jump a hefty 36.6 per cent over the next seven years, according to the Oman Power and Water Procurement Company (OPWP).
Announcing the projections in its latest 7-year outlook for the power and water sector, the state-owned offtaker said total gas consumption by the nation's critical energy sector is poised to jump from 6.0 billion standard cubic metres (Sm3) in 2011 to 8.2 billion Sm3 in 2018.
Oman's electricity output is almost entirely based on the use of natural gas as a fuel. Gas consumption within the Main Interconnected System (MIS) covering north Oman is projected to grow at an average rate of 5 per cent per year, which is lower than the expected growth in electricity demand of about 8 per cent per year.
OPWP has attributed the lower growth rate in gas consumption to the utilisation of fuel-efficient gas turbine technology, which is a feature of a string of new plants under development at Sur, Barka (Phase 3) and Sohar (Phase 2).
In line with a longstanding policy that accords priority supply to the electricity sector, the Ministry of Oil and Gas has pledged allocations of the required volumes of natural gas for the power and associated water sector over the medium term. These volumes, says OPWP, would be sufficient to cover the projected requirements through 2018 under the low-case scenario, which envisions an average growth rate in peak energy demand of 8 per cent in 2018.
However, the committed gas volumes are deemed adequate to cover fuel demand only through 2016 under the expected demand scenario, and through 2015 under the high-case scenario. The latter scenario envisions an 11 per cent increase in annual electricity demand.
"Additional overall quantities, and supplies to new projects, remain subject to future Ministry of Oil and Gas confirmation, though the ministry has indicated that the power and water sector, is as a matter of government policy, to be given a high priority in future gas allocation," OPWP said in its Outlook Statement.
The offtaker nevertheless outlined several initiatives it said it would likely need to take to help secure the power sector's additional fuel requirements in the future. One such measure would be to discuss with the government the feasibility of importing gas specifically for use in power generation (and associated water production).
Another measure is to consider invoking provisions in the Power Purchase Agreements concluded with the Barka 3 and Sohar 2 power projects for the optional use of diesel instead of gas as a fuel.
Yet another option is to bring forwards plans for the procurement of new generation capacity based on a fuel other than gas, possibly starting with new capacity potentially required in 2017, OPWP stated. In the Salalah System, which covers much of Dhofar Governorate, overall fuel consumption is expected to rise at an average rate of about 4 per cent annually, which is substantially lower than the expected growth rate in electricity demand of about 11 per cent annually.
The lower growth rate in fuel consumption relative to power demand is attributable to the launch of the new Salalah Independent Water and Power Project (IWPP) at Taqah. The gas-based plant, along with future projects planned in Dhofar, will make a significant contribution to fuel efficiency within the System, OPWP added.
© Oman Daily Observer 2012
