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|10 February, 2019

Oman's Sohar Power to operate desalination plant until March 2022 only

OPWP notified Sohar Power that its prequalification bid had succeeded for Power only, and not for the Water component

Image used for illustrative purposes. Tubes holding filters and high-tech membranes remove salt from ocean water at the desalinization plant of Peruvian mining company Milpo at its Cerro Lindo mine in Chincha February 19, 2008. REUTERS/Mariana Bazo

Image used for illustrative purposes. Tubes holding filters and high-tech membranes remove salt from ocean water at the desalinization plant of Peruvian mining company Milpo at its Cerro Lindo mine in Chincha February 19, 2008. REUTERS/Mariana Bazo

REUTERS/Mariana Bazo

MUSCAT  – Sohar Power Company SAOG, which owns and operates a major Independent Water and Power project located with the industrial port at Suhar, has said that it will not be able to extend the operations of its desalination plant beyond the term of its current Power and Water Purchase Agreement (PWPA) ending in March 2022.

Sohar Power said in a filing to the Muscat Securities Market that the company participated in the 2022 Power Procurement Process with the objective of securing a new PWPA with effect from 2022 from Oman Power and Water Procurement Company (OPWP), the sole procurer of new electricity generation and water desalination capacity.

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As part of its submission to OPWPs 2022 Power bidding process, Sohar Power said it had completed the prequalification stage for a Power-only offer.

OPWP, it said, had informed the bidders on February 7, 2019 of their prequalification status and notified Sohar Power that its prequalification bid had succeeded for Power only, and not for the Water component.

As a consequence, Sohar Power will not be able continue operations of its desalination plant beyond the term of the current PWPA ending March 2022. The company added the situation triggers an impairment review of the desalination plant resulting in an impairment loss of RO 19.6 million to be recorded in the 2018 financial year.

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