1. Oman Water and Energy Conference Yaqoob Al Kiyumi Chief Operating Officer
19 May 2015

2. OPWP’s Role – Areas/Systems
MIS
Created as part of the of the electricity sector restructuring
Government owned with statutory functions and duties
Regulated by licence from AER
“Single Buyer” of power and desalinated water
OPWP’s rating:
S&P Stable ‘A -’
Moody’s - A1
Turnover (revenue)- forecasted for 2015
690 million OMR
Muscat
Ad Duqm
Salalah
Salalah System

3. Current Market Structure and Regulatory Framework
Al Suwaidi Power Company SAOC
Al Batinah Power Company SAOC
Direction of payments
Water Departments pay PWP
for bulk purchases of desalinated water charged at a cost reflective Bulk Supply Tariff (BST);
Water BST includes the PWP’s costs of water procurement activities
SMN Barka Power Company SAOG
Water Departments
Subsidy
Al Rusail Power Company SAOC
Oman Power & Water
Procurement Company SAOC
Wadi Jizzi Power Company SAOC
Muscat Electricity Distribution Company SAOC
Discos pay PWP for
bulk purchases of electricity charged at a cost reflective Bulk Supply Tariff (BST);
Electricity BST includes PWP’s costs of electricity procurement activities
United Power Company SAOG
PWP pays Production Facilities for
Capacity and Output in accordance with terms of PPA/PWPA
Ancillary Services
Al Kamil Power Company SAOG
Majan Electricity Company SAOC
Al Ghubrah Power & Desalination Company SAOC
Mazoon Electricity Company SAOC
Oman Electricity Transmission Company SAOC
ACWA Barka SAOG
Sohar Power Company SAOC
Production Facilities & Others pay OETC for
Connection to Transmission System
Dhofar Power Company SAOC
Discos pay OETC for
Connection to OETC’s Transmission System (Distribution business)
Use of OETC’s Transmission System (Supply business)
Phoenix SAOC
Customers
Muscat Desal. SAOC
Dhofar Generation Co
SEMBCORP SAOC
Sharqiyah Desalination
Future Projects
All intra sector transactions: (i) regulated & (ii) cost reflective (no direct subsidy)

4. Current status (ownership structure)

5. Capacity Growth Trend (Private Sector Involvement)
This graph shows the trend of private sector involvement in generation activities
Key to note is the level of private sector investment that freed Government fiunds for othjer projects, and
The level of foreign investment in the electricity sector in Oman

6. Electricity Demand MIS: Demand growth at about 9% per year
Dhofar: Demand growth at about 10% per year
MIS demand growth is reduced somewhat from the previous forecast
Reduction reflects primarily a reassessment of industrial demand requirements
Actual 2014
2015
2016
2017
2018
2019
2020
2021
Ave.% Growth
Expected Demand
Annual Energy (TWh)
25.0
27.8
30.6
33.4
36.9
40.1
43.5
47.1 9%
Peak Demand (MW)
5,122
5,653
6,225
6,797
7,464
8,076
8,775
9,530
High Case Demand
29.7
36.4
40.4
44.0
48.1
51.8
11%
5,952
6,679
7,308
8,041
8,724
9,537
10,329

7. MIS Electricity Supply Plan
2016: shortage is expected due to constraints on Sur IPP, likely to be addressed by GCCIA import, temporary generation, or demand management;
Contract extensions:
Ghubrah and Wadi Jizzi to be extended only through 2018 summer
Al Kamil to be extended through 2020, then eligible to compete for new PPA in 2021
Barka I still to be resolved; expected to be extended to 2020, similarly to Al Kamil
2021: new capacity required that may include both new entrants and contract extensions, as well as spot market participants
Procurement process may begin in 2017

8. Water Supply Plan: Interconnected Zone
2015: In shortage, available capacity less than peak demand
2016: capacity meets demand, but below target (reserve margin)
: capacity meets target in both scenarios, even without Barka 1 extension
2021: new capacity required, subject to demand and whether Barka 1 is extended
Ghubrah retired in 2018; Barka 1 MSF expected to retire; Capacity sufficient to allow Sohar 1 to shift to reduced operation after COD of new Sohar IWP

9. Water Supply Plan: Sharqiyah Zone
: In shortage, available capacity less than peak demand
PAEW is responsible for meeting the supply gap
2017: With Sur IWP extension, capacity meets demand but not reserve target
2018: In shortage during peak months
2019: New Sharqiyah IWP at 12 MIGD meets capacity needs through 2021

10. Efficiency Improvement Reduces Gas Needs
MIS Fuel Requirements
Gas Forecast
Efficiency Improvement Reduces Gas Needs
Electricity demand growing at 9%, whereas gas consumption increasing at just 4%
: 24% reduction in per-unit gas consumption
: Further 27% reduction projected, due to:
Shift from MSF to RO desalination
Higher efficiency CCGTs
Retirement of old units
Improvements in economic dispatch

11. Dhofar Power System Supply Plan
Salalah 2 IPP was recently awarded this year and construction will begin soon
A 50 MW wind farm is expected by It will reduce the energy requirements from gas-fired power plants
No further generation requirements expected until 2022 or later.

12. Dhofar Water Supply Plan
Water demand forecast unchanged
: Demand exceeds capacity of Salalah IWPP, but groundwater supply is sufficient to meet both demand and reserve target
Salalah IWP to start procurement in 2015 for 2019 start, at about MIGD

13. Main Procurement Activities in 2015
Ibri & Sohar3 IPP
Sohar IWP
Barka IWP
Sharqiyah IWP
Salalah IWP
Capacity MW
55 MIGD
61.8 MIGD
12.1 MIGD
18-22 MIGD
RFQ
Q2 2014
Q1 2015
Q4 2015
RFP
Q1 2016
Bids Due
Q3 2015
Q2 2016
Award Anticipated
Q4 2016
COD
EP: Q (Ibri)
SCOD: Q (Sohar)
Q (Ibri)
Q2 2018
Q1 2019
Potential additional procurement starts in 2015:
Duqm IWP (12 MIGD)
Khasab City IWP (3 MIGD)

14. Feedback / Further Information
Questions and comments welcomed Further information available at:

15. Thank You

16. Contracted Generation Capacity
Plant Owner
Type
Status
Contract
Start
Contract Expiry
Power Capacity (net MW)
Water (MIGD)
Al Ghubrah Power and Desalination Co.
PWPA
Operational
2005
2018
475 40
Rusail Power Co.
PPA
2022
687
Wadi Al-Jizzi Power Co.
2020
245
United Power Co.
1996
273
Al Kamil Power Co.
2002
2017
297
ACWA Power Barka
2003
450
30*
Sohar Power Co.
2007
590 26
SMN Barka Power Co.
2009
2024
710 33
SembCorp Salalah Power and Water Company
2012
2027
445 15
Al Batinah Power Co.
2013
2028
744
Al Suwadi Power Co.
Phoenix Power Co.
Under Construction
2014
2029
2000
 MCT Desal. Co. 42
*10 MIGD Under construction
Total by 2014
7660
186

17. CRITICAL FOCUS AREAS IN PROCUREMENT
Increasing awareness and pushing for highest priority for Health Safety and Environment
Securing commitment from developers for independent monitoring and reports on the HSE during the construction period
Enforcement of Omanization
Providing more opportunities for Omanis to participate in critically important sector
Promotion and development of Omani content
Promote and enforce, where applicable, utilisation of local content and development within the large capital expenditure projects
Omani content ranging anywhere between 18% to 30% of the EPC Cost
Economic purchase obligations
Transparent and competitive bidding process
Promote efficient and proven technology and solutions to best utilize natural gas available
Evaluation of proposals undertaken on the basis of economic price of gas