With demand growth projections for potable water in Oman steady at 6% through to 2020, the Public Authority for Electricity and Water (PAEW), in cooperation with Nama Group subsidiary the Oman Power and Water Procurement Company (OPWP), are implementing strategies aimed at increasing capacity to meet shortfalls, particularly in the northern region, which includes the interconnected and Sharqiyah zones. Projected capital expenditure in developing new water infrastructure and financing the cost of renewing aging transmission and distribution infrastructure has been estimated at $6.5bn until 2040 by planning managers at the PAEW. This includes projects that support the development of distribution networks, new reservoirs to improve consistency of supply and reverse osmosis (RO) water plant projects to expand water production capacity. Mohammed Al Hashani, managing director of United Gulf Pipe Manufacturing, told OBG, “Despite the downturn in oil prices, Oman continues to invest heavily in electricity and water projects, so demand for materials like plastic and propylene used in these projects remains strong.”
Desalination Projects
Project agreements have been signed for the establishment of a number of desalination stations, which are currently at different stages of development and expected to come on-line beginning in 2019. The largest of these plants is the Barka Desalination Plant Phase IV (Barka IV). In March 2016 the OPWP signed agreements with a consortium led by Itochu Corporation to develop the OR115m ($298.7m) Barka IV, some 70 km north-west of Muscat in Al Batinah South Governorate. The high-efficiency RO desalination facility will be Oman’s largest when it goes into service in 2018, equipped to produce a total of 281,000 standard cu metres per day (scmd) of potable water output, enough to cover nearly 30% of demand around Muscat. The project will be structured as an independent water project (IWP), with the OPWP purchasing potable water produced by the project under a water purchase agreement that has a term of 20 years.
Another major independent desalination plant is scheduled to come on-line in 2018 at Sohar Port. In April 2016 the OPWP signed an OR100m ($259.7m) agreement with a consortium of companies, including Valoriza Agua-Spain (51%), Oman Brunei Investment Company (25%) and Sogex Oman Company (24%), to establish Myah Gulf Oman Desalination Company as a vehicle to develop the desalination plant. The OR100m ($259.7m) RO project is one of the largest of its kind in the Al Batinah North Governorate, with an expected production capacity of 250,000 scmd that will meet about 80% of water demand in the governorate when it commences commercial operations.
According to the agreement, Myah Gulf Oman Desalination Company will build and operate the plant for a period of 20 years. The OPWP will have the right to buy the desalinated water produced by the plant for the duration of the concession period. The project is among the first in Oman to be entirely financed by local banks, including Bank Muscat and Oman Arab Bank. Before the Barka and Sohar plants come on-line in 2019 and 2018, Oman will welcome a large 200,000-scmd IWP in Qurayyat, about 20 km south of Muscat, designed, built, owned and operated by a consortium led by Singapore’s Hyflux. The project is expected to begin commercial operations in May 2017 under a 20-year water purchase agreement with the OPWP.
Greater Capacity
Over the longer term, major strategic projects include a $300m, 281,000-scmd IWP intended to serve Muscat when it commences operations by 2022. Another 167,000-scmd project is scheduled to commence operations in 2022 for the Al Batinah North and Al Dhahirah Governorates when the existing Sohar I multi-stage flash units reach the end of their contract, according to the OPWP’s Seven Year Statement 2015-2022. Tenders for selecting multinational firms or consortiums for developing these desalination projects are expected to be initiated by the OPWP in 2017. Al Hashani told OBG, “Delayed payments is an issue that has seriously impacted the construction space, particularly for government projects. Fortunately, the construction and commissioning of desalination plants is normally overseen by private companies, so the risk for these projects is much lower.”
Smaller Facilities
Other near-term procurement strategies aimed at meeting demand growth include plans to build IWPs in Salalah, Sharqiyah and Duqm, with a combined water generation capacity of nearly 200,000 scmd, and another in Khasab with a 11,4000-scmd capacity. The OPWP has already selected pre-qualified companies for the IWPs in Salalah and Sharqiyah, which are scheduled to come on-line by 2020, followed by a temporary desalination plant at Asillah (8330 scmd), which will serve most of the southern area, according to the PAEW’s 2015 annual report.
Duqm and Khasab are also expected to be brought into operation by the fourth quarter of 2019, with the PAEW stating in its 2015 annual report that it is working with Special Economic Zone Authority Duqm (SEZAD) to ensure supplies of drinking water that will meet demand in the Duqm zone. The Duqm desalination project will have a water desalination capacity of 60,000 scmd when it begins operations by the end of 2019, according to the OPWP’s annual report. The Khasab IWP will produce a smaller volume of roughly 16,000 scmd of potable water using RO technology.
Aimed at providing stop-gap capacity to address projected shortfalls in potable water capacity, the OPWP is also moving forward with the development of temporary desalination capacity where required. In March 2016 the government procurement company signed a water purchase agreement to establish the Qurayyat and Asillah Temporary Desalination Plants with Muscat Water in the Muscat and Al Sharqiyah South Governorates, respectively. The Qurayyat plant is set to begin commercial operations mid-2017, with a potable water capacity of 8000 scmd. The Asillah Desalination Plant in Al Sharqiyah South began operations at roughly the same time, contributing 10,000 scmd. Both projects are structured as IWPs, with the OPWP purchasing the potable water produced by the project under a water purchase agreement for a period of four years, renewable for two years.
Desalination Facilities
Other strategies aimed at enhancing water supply contingencies include the procurement of seawater desalination facilities for temporary deployment along the coast. The OPWP invited firms to register interest in mid-2016 as a prelude to the tendering of contracts for the long-term hire of seawater desalination facilities. In its June 2016 tender announcement the OPWP stated that seagoing, bargemounted plants are a first priority for procurement, followed by alternative land-based portable units that can assure a temporary supply of water. The capacity of a single unit is planned to be 10,000-25,000 scmd, with total requirements of about 100,000 scmd.
Water Pipeline Networks
As part of an ambitious water security strategy adopted by the PAEW aimed at distributing water to 98% of the sultanate’s population by 2040, the government is also investing heavily in distribution networks capable of meeting projected demand. The main line transmitting water from Al Ghubra Desalination Plant to a pumping station in Wadi Adai and onward via sub-main pipelines to reservoirs in Bausher and Qurum in Muscat Governorate was completed in 2016, and tenders were awarded for the construction of a water transport line from Buashar to Seeb in the Muscat Governorate at a cost of OR32.44m ($84.2m). Smaller contracts for the construction of water distribution networks in the wilayats of Nakhal, Al Awabi and Wadi Al Ma’awel in the Al Batinah South Governorate were valued at OR8.49m ($22m).
In partnership with SEZAD, the PAEW is also developing a 25-km potable water distribution network at the port of Duqm. One of the PAEW’s primary objectives in the development of new water distribution networks is to improve the efficiency and effectiveness of service delivery to customers. A key challenge in this context is unaccounted for water. A significant portion of water that enters the PAEW system – more than 30% – is lost to leaks, reservoir overflows, fraud, theft or metering error between the source (desalination plants and wells) and the customer, according to the PAEW.
In 2015 half of the governorates served by the PAEW saw a reduction in unaccounted for water (UFW) measured as a percentage of water put into the system, although the absolute level of UFW across their system rose by almost 5m cu metres, according to the authority’s 2015 annual report. Given the heavy reliance on desalination and the high cost of water production in the sultanate, controlling inevitable losses to technically and operationally manageable levels is crucial for efficient management of Oman’s water service networks. Supported by an efficiently managed expansion of these distribution networks and new capacity from desalination plants scheduled to come on-line between 2018 and 2020, Oman’s investment in capacity and transmission will help meet demand in the years ahead.
Read More from OBG
