OPWP issues letter of award to Marubeni-led consortium
MUSCAT -- Project agreements linked to the implementation of Oman's biggest power project - at Sur in the Sharqiya region - are due to be signed by around the middle of this month, the Observer has learnt.
On Monday, the Oman Power and Water Procurement Company (OPWP), which oversees the procurement of all new power generation and related water desalination capacity in the Sultanate, formally notified the consortium led by Japanese conglomerate Marubeni Corporation that it has been selected by the Tender Board to execute the estimated 2,000 megawatts (MW) capacity scheme.
The Marubeni consortium led a trio of preferred bidding groups, that included consortiums headed by Mitsui & Co and Siemens, to win a license to design, finance, construct, operate and maintain the Independent Power Project (IPP) at Sur. Investments in the power-only scheme are expected to range between $1.5 billion and $1.7 billion, it is learnt.
Marubeni, as a lead developer, holds a 50 per cent equity stake in the winning consortium comprising also Chubu Electric of Japan (30 per cent), Qatar Electricity and Water Company (15 per cent), and Multitech of Oman (5 per cent). Multitech is the power engineering subsidiary of the local BEC Group.
The award of the Sur IPP licence to the Marubeni-led consortium will be formalised at a ceremony, tentatively set for the middle of this month, where a raft of agreements will be signed with various ministries and government entities.
Key among these pacts is the Power Purchase Agreement (PPA) which commits all of the project's electricity output to OPWP over an initial 15-year period.
Representatives from the Ministry of Oil and Gas will also ink a Gas Supply Agreement (GSA) allocating the required volumes of natural gas for the IPP. It is estimated that the IPP's daily requirement of feed gas is around 10 million standard cubic metres per day.
Also on the agenda is a Usufruct Agreement which will be signed with the Public Establishment for Industrial Estates (PEIE), which administers the country's network of industrial parks.
The PEIE has earmarked a site within the Sur Industrial Estate for the construction of the IPP.
Besides, Marubeni and its partners will ink a Founders' Agreement with the Electricity Holding Company (EHC). Ratifying the agreements on behalf of the government will be the Ministry of Financial Affairs.
The award of the licence marks the successful conclusion of an international competitive process that was fast-tracked to help tide over a projected shortfall in generation capacity over the 2013 timeframe and beyond.
The winning consortium will be expected to work towards a challenging construction timeframe designed to ensure that at least part of the new IPP's capacity, equivalent to roughly 400 MW, is brought into operation ahead of summer in 2013. The IPP's full capacity of 1,500-2,000MW is slated for full commissioning ahead of peak summer demand in 2014.
© Oman Daily Observer 2011
