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Oman power projects to push up demand for natural gas by 3%

Peak demand for electricity is expected to increase at an annual average of 6% per year, from 5,920 Megawatt in 2016 to 8,960 Megawatt in 2023

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Power generation in Oman is set to witness a 3% annual growth in demand for natural gas over the next seven years within the Sultanate’s Main Interconnected System (MIS) areas.

The main power and desalination plants in Oman saw a 4% decline in natural gas consumption in 2016 to nearly 7.01 billion standard cubic metres, the equivalent of 19.4 million standard cubic metres per day, reported Times of Oman.

“The reduction of 4 per cent growth in natural gas requirements contrasts with the 4 per cent increase in electricity generation over the same period. This significant improvement stems mainly from transmission grid upgrades that enabled better access to the most efficient generation plants,” said a seven-year outlook released by Oman Power and Water Procurement Company (OPWP).

The primary fuel resource for power generation and associated water desalination plants in the main interconnected system is natural gas, supplied to power and desalination plants by the Ministry of Oil and Gas (MoG).

Of late, the ministry had indicated that there could be a cap on natural gas supply to power plants. “While MoG has recently approved gas allocations to the next two independent power projects (IPPs) that OPWP plans to procure, MoG has also indicated that future natural gas supply is constrained.”

In case natural gas allocations are not available to the power and water sector, Oman Power and Water Procurement Company plans to bring forward to procure new generation capacity based on a fuel other than natural gas, such as renewable energy and coal projects, reported Times of Oman.

Also, OPWP will discuss with the government the feasibility of importing natural gas specifically for use in power generation, the seven-year report noted.

Peak demand for electricity is projected to increase at an annual average of 6% per year, from 5,920 megawatt in 2016 to 8,960 megawatt in 2023. Peak demand is expected to grow at a lower rate than energy demand due to the introduction of Cost-Reflective Tariffs (CRT) for large commercial, government, and industrial consumers in 2017.

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