meed-logo

line1 line2 line3
SIGN IN / REGISTER

Oman expands grid connectivity

10 December 2023

Oman’s power and water sector has awarded an annual average of approximately $1.5bn-worth of contracts over the past 11 years – a relatively low value compared to the total awarded every year by some of its GCC neighbours.

However, 2023 can still be considered a good year for the sultanate, as contracts worth an estimated $1.2bn have been awarded.

This is an improvement on the performance of the previous two years, which saw very limited project activity within the sector, with contract awards valued at just $104m in 2021 and $244m in 2022.

Having adopted a policy to not procure further gas-fired thermal power plants, Oman awarded the contracts to develop its second and third utility-scale solar photovoltaic (PV) plants in early 2023.

The Manah 1 and 2 solar PV independent power projects (IPPs) each have a capacity of 500MW. Wadi Noor Solar Company, comprising France’s EDF Renewables and South Korea’s Korea Western Power Company (Kowepo), will deliver and maintain the Manah 1 solar IPP project for 20 years.

Another team, comprising Singapore’s Sembcorp Industries and China-headquartered Jinko Power Technology, will develop the Manah 2 IPP scheme. The country’s first utility-scale solar project, Ibri 2, became operational in 2021. 

Oman’s Ministry of Regional Municipalities & Water Resources also awarded a $108m contract for the construction of a flood protection dam in Wadi Ajay Gorge in Muscat in early 2023. The rest of the awarded contracts comprise water and power transmission pipeline projects across the sultanate.

Demand growth

Nama Power & Water Procurement Company (PWP), formerly Oman Power & Water Procurement Company (OPWP),  expects peak electricity demand for the main interconnected system (MIS), the sultanate’s main electricity grid, to grow by an average of 3.54 per cent annually from 2022 to 2029, reaching 8,350MW at the end of the forecast period.

Most of this growth is expected to occur in the near term, as the economy recovers from the effects of the Covid-19 pandemic, according to PWP’s most recent Seven-Year Statement, which covers the years 2023-29. It is also higher compared to the 2.5 per cent average annual peak demand growth rate seen between 2015 and 2022.

PWP’s low-case forecast scenario shows an average annual peak demand growth of 1.3 per cent, with the base growing from 6,628MW to just over 7,200MW. A high-case scenario, on the other hand, indicates an annual demand growth of 5.2 per cent, which can drive the demand to reach 9,430MW.

Annual peak demand growth in the smaller Dhofar grid is expected to average 5 per cent between 2022 and 2029.

The first phase of Oman’s North-South Interconnection project, known as Rabt, became operational in November. The 400-kilovolt (kV), 670-kilometre (km) project required an investment of about $966m.

The first phase of Oman’s North-South Interconnection project, known as Rabt, became operational in November

The project enables the MIS, serving the northern half of the Oman grid, to connect with Nihada in Al-Dhahirah Governorate and Duqm Special Economic Zone (SEZ) in Al-Wusta Governorate.

Al-Wusta offers an optimal location for solar and wind projects, which the country aims to develop as part of its green energy ambitions.

Also part of Rabt's first phase, the isolated networks of Petroleum Development Oman and the Rural Areas Electricity Company (Tanweer) in Duqm SEZ, have been interconnected.

A second phase is being planned for Rabt. To be launched later this year, it will comprise a 500km, 400kV transmission line from Duqm to Dhofar.

Water requirements

Peak water demand in the MIS is expected to increase by an average of 2 per cent annually between 2022 and 2029, while peak water demand in Dhofar is expected to grow by an average of 7 per cent a year.

To meet the expected demand rise in the MIS, several independent water projects are being developed or planned. These include the Barka 5 scheme, which has a capacity of 100,000 cubic metres a day (cm/d) and is expected to come online in 2024. Ghubrah 3, which has three times as much capacity, is expected to be operational two years later.

A third project, a replacement capacity for the Barka zone of about 102,000 cm/d, is also expected to be added in 2024.

Future projects

In addition to the second phase of Rabt, Oman is in the early procurement phase of several solar and wind projects, in line with meeting demand growth and replacing expiring contracted capacity.

The power and water purchase agreement for the gas-fired Barka 2 independent water and power facility, for instance, expires in 2024, while the contract for the Barka 3 IPP expires in 2028.

KPMG Lower Gulf, a subsidiary of the Netherlands-based consultancy company, has been selected to provide financial advisory services to Nama PWP for the Ibri 3 solar IPP, which will have a capacity of 500MW. Ibri 3, along with the planned 100MW Jalaan Bani Bul Ali wind power project, will cater to the MIS.

Another key scheme being planned to connect to the MIS is Oman’s first waste-to-energy plant in Barkah. When complete, the facility is expected to treat 4,500 tonnes of municipal waste a day, produce 130MW-150MW of energy, and reduce the carbon footprint of Oman's landfills by 1.3 million tonnes annually.

For the Duqm grid, a 100MW wind IPP is being planned, in addition to a potential concentrated solar power plant. These plants are expected to become operational in 2026 and 2028, respectively. A 100MW wind project is also being planned for Dhofar, although there has been no fixed target for when it is expected to become operational.

In May, it was also announced that Oman Electricity Transmission Company is planning a second link to the GCC grid. The planned 400kV power transmission link is scheduled to start operations in the first quarter of 2026.

Hydrogen hubs

There are major plans to develop green hydrogen hubs in Duqm and Dhofar, in line with Oman's ambition to produce up to 1.25 million tonnes a year of green hydrogen by 2030.

The proposed projects will integrate renewable energy plants that will supply power to the electrolyser plants, which split water into hydrogen and oxygen, as well as the other units of the facilities.    

The government has so far awarded land concessions to international consortiums looking to develop integrated green hydrogen and ammonia facilities in the country.

The programme will have a potentially significant impact in terms of Oman’s future gross renewable energy capacity growth, with some of the earliest announced projects requiring several gigawatts of wind and solar power.

However, since most of the planned projects include captive renewable energy power plants, they will not necessarily affect the Omani utility companies' future capacity procurement plans. 

On the other hand, water demand may be affected as the electrolysis plants require pure water to be split into hydrogen and oxygen.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11354723/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Rabigh 2 IPP expansion secures $2.58bn financing

    5 October 2026

    Saudi Arabia's Rabigh 2 combined-cycle gas-turbine (CCGT) independent power project (IPP) expansion has reached financial close.

    In a disclosure to the Saudi Exchange, Acwa said it had secured SR9.69bn ($2.58bn) in long-term financing for the project, which has a generation capacity of 2,313.5MW.

    In April, MEED reported that  Acwa and Saudi Energy (formerly Saudi Electricity Company) had signed a 31-year power purchase agreement (PPA) with Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), for the project.

    The project involves the development of a combined-cycle gas turbine (CCGT) plant in the Mecca region. It is being developed by Al-Morjan Two Electricity Company, with Acwa and Saudi Energy each owning a 40% stake in the project.

    The contract is valued at SR11.5bn ($3.07bn), the companies said in separate stock exchange filings at the time. The carbon-capture-ready power plant will be implemented under a build, own and operate contract.

    The financing has a tenor of about 34 years and was provided by a consortium of local, regional and international lenders.

    The lenders are:

    • Abu Dhabi Commercial Bank
    • Alinma Bank
    • Boubyan Bank
    • China Minsheng Banking Corporation, Hong Kong Branch
    • Commercial Bank of Dubai
    • HSBC Bank Middle East
    • Industrial and Commercial Bank of China
    • Industrial Bank, Beijing Branch
    • National Bank of Greece, Cyprus
    • Riyad Bank
    • Saudi Awwal Bank
    • Saudi National Bank
    • Standard Chartered Bank, Taiwan
    • Sumitomo Mitsui Trust Bank, London Branch

    The project scope also includes financing and expansion of a 380kV electrical substation.

    According to regional project tracker MEED Projects, construction works have commenced on the project and a joint venture of Egypt's Elsewedy Electric and China's Sinohydro has been working as the main contractor.

    Rabigh 1 extension

    In January, Saudi Energy announced a spearate energy conversion agreement with SPPC for the purchase of electricity from the Rabigh 1 power plant expansion.

    The contract is valued at SR5.33bn ($1.42bn).

    It covers the development, financing, construction, ownership and operation of the gas-fired power plant, which will have a generation capacity of 1,179MW.

    A joint venture of Elsewedy Electric and Germany’s Siemens Energy is undertaking the engineering, procurement and construction work for the project, which is expected to be completed by the end of 2026.

    US/India-based Synergy Consulting is the financial advisory consultant to Saudi Energy on this project.

    Acwa also recently started initial commercial operations at the Taiba 1 and Qassim 1 combined-cycle gas turbine (CCGT) power plants, as reported by MEED.

    The plants have a combined generation capacity of about 3.8GW and are two of four projects procured under the first round of Saudi Arabia’s gas-fired independent power producer (IPP) programme by Saudi Power Procurement Company.

    A team of Saudi Energy, formerly Saudi Electricity Company, and Acwa won the contract to develop and operate the projects in 2023.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20270643/main.jpg
    Mark Dowdall
  • Contractors submit bids for Libya refinery

    5 October 2026

     

    Bids have been submitted for the main contract for Libya’s planned South Refinery project and are currently under technical evaluation, according to industry sources.

    The project, located in Ubari in southern Libya, has gained momentum over the past year, and the main contract is anticipated to be worth more than $600m.

    The main contract is expected to use the engineering, procurement and construction (EPC) model.

    The EPC work is expected to take 50 months, and the facility will be designed to process 30,000 barrels a day (b/d) of crude oil.

    In March, US-based engineering company KBR was awarded a contract by Zallaf Exploration, Production & Refining of Oil & Gas Company to provide project management and technical services for the project.

    Under the terms of the contract, KBR will provide contract management, project management and supporting technical services throughout the project’s EPC phases.

    The refinery is expected to produce:

    • Propane and butane for domestic and industrial uses
    • Gasoline
    • Kerosene
    • Diesel
    • Fuel oil

    In March, KBR said that the project was aligned with its “long-standing commitment to advancing vital oil and gas infrastructure in Libya”.

    Libya currently operates five main refineries with a combined nameplate capacity of 380,000 b/d, but actual throughput is closer to 180,000 b/d due to poor maintenance and damage from military clashes.

    In addition to the South Refinery project, Libya also plans to upgrade the Zawiya refinery and carry out projects at the Serir, Brega, Tobruk and Ras Lanuf refineries.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20267178/main.jpg
    Wil Crisp
  • Dubai tenders sewage and stormwater projects

    5 October 2026

    Register for MEED’s 14-day trial access 

    Dubai Municipality has issued tenders for a 3,000-cubic-metre-a-day sewage treatment plant (STP) and a strategic stormwater drainage system.

    The first tender is for the design and construction of the Al-Lissaily STP.

    The project, identified as DS311/1, covers the design, supply, installation, construction and commissioning of the plant in the Al-Lissaily area.

    Dubai Municipality’s Sewerage and Recycled Water Projects Department is issuing the tender. The bid submission deadline is 29 October.

    The facility is located near residential communities and farming areas. The project will therefore include measures for odour control, treated effluent quality, noise mitigation and environmental performance.

    The municipality said the plant will incorporate landscaping and architectural features designed to reflect Dubai’s heritage character and the surrounding farming environment.

    The second tender is for project TF-07-C1, a strategic stormwater drainage system covering more than 100 million square metres.

    The project area extends from Sheikh Mohammed Bin Zayed Road (E311) to the north to Emirates Road (E611) to the south, and from Expo Road in the west to Dubailand in the east.

    The project will provide stormwater infrastructure and service connections for more than 20 private developers, as well as the Al-Yalayis 5 community.

    It will also support major roads in the Jebel Ali area, including Sheikh Mohammed Bin Zayed Road, Emirates Road, Sheikh Zayed Road, Sheikh Zayed Bin Hamdan Al-Nahyan Road, Hessa Street, Al-Yalayis Road and Al-Fay Road.

    The scope includes a major stormwater gravity drainage system, with pipeline diameters of up to 3,000mm.

    Dubai Municipality said the project is intended to increase drainage capacity, improve relief for existing and new stormwater systems, and strengthen protection against extreme rainfall events.

    The bid submission deadline is 22 October.

    The municipality also recently invited contractors to bid for a contract to upgrade and rehabilitate the stormwater system in Abu Hail.

    The project comprises a stormwater pumping station with a total discharge capacity of 26 cubic metres a second. It is estimated to cost up to $163m.

    Bid submissions are due by 15 October.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20266881/main.jpg
    Mark Dowdall
  • QatarEnergy gives North Field West topside bidders more time

    2 October 2026

     

    QatarEnergy has granted contractors more time to prepare bids for a tender covering the engineering, procurement, construction and installation (EPCI) of large platforms for the North Field gas field in Qatari waters.

    Contractors now have until 12 October to submit technical bids for the project, according to sources. Commercial bids are currently due on 10 November.

    The following contractors, among others, are understood to be bidding for the North Field West (NFW) production deck modules (PDMs) tender:

    • China Offshore Oil Engineering Company (China)
    • Larsen & Toubro Energy Hydrocarbon (India)
    • McDermott (US)
    • Saipem (Italy)

    The core scope comprises the EPCI of four PDMs and associated structures. The PDMs will increase gas production from North Field reservoirs and provide additional gas feedstock for the NFW liquefied natural gas (LNG) development.

    The tender, issued earlier this year, forms part of the wider NFW project, the third and final phase of the state enterprise’s North Field LNG expansion programme.

    The previous deadlines for technical bids were 30 August, 15 September and 28 September, while commercial bids were previously due on 25 October, as MEED reported.

    Before issuing the PDMs tender, QatarEnergy awarded US firm McDermott a contract for the EPCI of four offshore jackets that will also support gas feedstock supply for the NFW LNG project. The contract is estimated to be worth about $200m, MEED reported in January.

    North Field LNG expansion

    QatarEnergy is advancing the three phases of its estimated $40bn North Field LNG expansion project. EPC works on all three projects are progressing.

    QatarEnergy is understood to have committed nearly $30bn to the first two phases – North Field East (NFE) and North Field South (NFS) – which will lift Qatar’s LNG production capacity from 77.5 million tonnes a year (t/y) to 126 million t/y by 2028.

    QatarEnergy awarded the main EPC contracts for NFE in 2021. The project was intended to raise LNG output to 110 million t/y by 2025. The $13bn EPC package – covering the EPCI of four LNG trains, each with a capacity of 8 million t/y – was awarded in February 2021 to a consortium of Japan’s Chiyoda and France’s Technip Energies.

    In May 2023, QatarEnergy awarded the $10bn main EPC contract for NFS to a consortium of Technip Energies and Consolidated Contractors Company (CCC). The contract includes two LNG trains, each with a capacity of 7.8 million t/y.

    Once fully operational, the first two phases are expected to add 48 million t/y of LNG supply to the global market.

    QatarEnergy took the final investment decision on NFW earlier this year, awarding an EPC contract estimated at $8bn to a joint venture comprising Technip Energies, CCC and Gulf Asia Contracting in February.

    Chiyoda carried out the front-end engineering and design work for the NFW LNG project.

    The NFW scope covers the EPC of two LNG trains with a combined capacity of 16 million t/y, as well as associated facilities for gas treatment, natural gas liquids recovery and helium extraction.

    In addition to LNG, NFW is expected to produce about 175,000 barrels of oil equivalent a day of condensate, ethane and liquefied petroleum gas.

    With all three phases under EPC execution – and NFE scheduled for commissioning later this year – QatarEnergy is positioning itself to remain one of the world’s largest LNG suppliers in the long term.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20208200/main.jpg
    Indrajit Sen
  • Egypt implements oil and gas storage projects worth $1.1bn

    2 October 2026

    Egypt is implementing oil and gas storage projects worth a total of £E54bn ($1.1bn), according to a statement released by the country’s cabinet.

    Active developments include expanding El-Hamra Petroleum Port in El-Alamein on the Mediterranean coast, as well as building a jet-fuel storage and transport hub at the Badr depot in Cairo.

    Other projects include constructing new storage tanks at refinery complexes in Amreya, Alexandria; Assiut; and Cairo.

    Over the past 12 years, Egypt has built 84 petroleum storage facilities with a total capacity of 5.2 million tonnes, the cabinet statement said.

    Egypt has invested £E42.7bn ($880m) in developing these facilities, with the aim of bolstering domestic energy security.

    Completed infrastructure projects include facilities in Sohag (Upper Egypt) and Alexandria.

    They also include offshore terminal and storage facilities, a liquid bulk station in Ain Sokhna, and strategic crude oil storage tanks across the country.

    Storage facilities have become a strategic priority for Egypt since the US and Israel attacked Iran on 28 February, triggering a regional war that has disrupted shipping through the Strait of Hormuz.

    The disruption has made imports of hydrocarbon products into Egypt less predictable, increasing the importance of strategic stockpiles.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20208195/main.jpg
    Wil Crisp