Country focus: Oman's utilities needs
Why Oman is increasing its power and water producing capabilities
Oman is another Middle Eastern country facing power and water shortages due to population increase. UME looks at the country’s utilities sector and how its future is shaping up
Population growth in Oman means there is a pending shortage of both power and water. It is a familiar story in the Middle East and as ever, it requires the decision makers of the country to act.
Economic growth and a construction boom in the country have also increased the demand for power and water. The problem in Oman is worse than in most other areas. It has been reported that serious water shortages could be on the horizon. Only 1% of the world’s ground water resources are in Oman, while 5% of the world’s population is depending on this resource. This has led to an emphasis on water sustainability in the area.
Construction activity in Oman, which is fuelling the growth in population and the economy, is increasing, with several high profile projects being announced last year. A number of tourism construction contracts were awarded, including a Fairmont hotel. Among other announcements was Vale building a US$1 billion iron ore pellet factory.
Oman is not immune to the economic downturn and construction activity is expected to be affected in 2009. A decline in the price of oil is also expected to affect its limited oil revenues, and in turn government budgets.
This shortage has not gone unnoticed in Oman and approximately US$2 billion has been pledged to develop its water sector between 2006 and 2010, with US$1.8 billion of that to be invested into drinking-water projects.
The rainfall in Oman is reasonably high compared to countries such as Kuwait and Qatar. The country also relies less on desalination for its drinking water than its neighbours. In 2005, Bahrain, Kuwait and Qatar all had desalination to demand ratios that were above 90%. In the same year Oman’s ratio was 40%. In 2007 Oman produced 33,236 million gallons of water from desalination plants and well, which was an increase of just 0.2% from 2006, according to figures compiled by BMI.
In response to the impending shortage, independent water and power projects (IWPPs) have been implemented in the country. Oman Power and Water Procurement Company announced last year it is planning four IWPPs which will provide a generating capacity of 3,200MW. One of these IWPPs is set to be located in either Barkar or Sohar and will be Oman’s biggest to date, with a generating capacity of 1,300MW and a water desalination component that is capable of producing 55,000 m3 of water a day.
Other IWPPs are set for Al Ghubrah, Duqm and Salalah. They are expected be online between 2010 and 2015.
This shortage and the government’s actions in solving the problem has meant an increased amount of business to be done in the country. Corodex is currently working one project in Oman. Business development manager Mohanned Awad explains: “We are working on one major project there right now, which is a vacuum sewer system for the coastal community of Seeb (a suburb of Muscat). It’s a fairly large contract, we are subcontractors to Gulfar.”
The Seeb contract involved the design and supply of a vacuum sewerage network and ancillary works. The system will consist of 1,681 vacuum chambers equipped with 3-inch valves and five vacuum stations.
The firm has also finished several projects in Oman for Occidental. These include a 6,000m3/day water treatment plant, a vacuum sewer system for a camp in Mukuianza and a wastewater treatment plant for the same camp which was just recently commissioned.
Power production in Oman increased to 14,443GWh in 2007, a 6.3% increase from the previous year. Power generation in the area is increasing at a faster rate than water production.
One factor, which will eventually have an impact on all GCC countries, is the GCC grid. The grid is being developed through the GCC Interconnection Authority (GCCIA) and has an estimated cost of US$1.2 billion. The aim of the project is to improve the efficiency of power distribution in the region. Connecting up the GCC South Grid has already been completed. This involved connecting Oman with the UAE. The North Grid, connecting Kuwait, Saudi Arabia and Qatar via sub-sea cables, was supposed to be completed by the end 2008. The two grids are then scheduled to be linked up by the end of 2010.
Hauff Technik has recently been involved in some of the major power stations in Oman. The firm provides sealing to cables and pipes in power plants. It has recently been retrofitting its project in Majan Electricity Company substations in Oman.
“Our product has been developed in the last 20 years in Europe, usually the business model in Europe, we try to establish with architects and planning so it is built in new buildings,” Dr Michael Seibold, managing director of Hauff Technik comments. “This was our primary goal around 20 years ago. Now you have existing assets, in Oman you have around 40 grid substations and there are about 400 primary substations. They have to be protected as well, so we are not only working on new substations.”
Seibold adds that the firm will be looking to get its product into the new substations being planned in Oman.
The privatisation of utilities in Oman has had positive results, reveals Seibold.
“Oman was favourable for two reasons; first of all it looked to privatisation, this was different to, for example, DEWA in Dubai. In Oman you have different companies for different parts of the region and you have different companies who manage and run the network and want to sell the power to you.
“This is a favourable situation because then people begin to think about their assets and if your goal is to run your network efficiently, you very much pay attention to maintenance costs and this kind
Before entering the Oman market, the company agreed a partnership with Bahwan Engineering Company, a firm which already has a firm grasp on power sector there. This, together with the country’s awareness and willingness to upgrade its network, has helped Hauff Technik become established there.
Oman is facing power and water shortages in the future, although it seems the economic downturn has bought the country a bit of time. And with projects underway and more being planned, it seems that time is being spent wisely, to meet Oman’s needs.