Sembcorp Salalah’s power and water plant, the Salalah Independent Water and Power Plant, holds a central position in the infrastructure of the Dhofar Governorate. As the largest and most energy-efficient power and water plant in the Governorate, the plant is expected to play a major role in meeting the growing power and water demand of the region over the short, medium and long term.
Sembcorp Salalah has a number of key competitive strengths:
Under the power and water purchase agreement (PWPA), Sembcorp Salalah is entitled to receive capacity charges from OPWP for 100% of the available power and water capacity of the plant, which comprise approximately 90% of the total revenue of Sembcorp Salalah. These capacity charges are payable by OPWP regardless of whether the actual output of the plant is dispatched by OPWP.
Given the projected growth in electricity and water demand, the plant is expected to remain critical to the continued supply of power and water in the Dhofar Governorate in the long term.
Under the natural gas sales agreement between Sembcorp Salalah and the Ministry of Oil & Gas, the plant has mitigated risks associated with gas quality, gas supply and gas price. In the event that natural gas is not available, and provided that Sembcorp Salalah is not in breach of its obligations regarding the operations of the plant, Sembcorp Salalah is still entitled to receive its incremental costs for the use of diesel from the Ministry of Oil & Gas and capacity charges from OPWP.
|i.||The expansion of existing facilities to deliver additional desalinated water capacity, in line with the current government policy to minimise use of groundwater; and|
|ii.||The sale of current excess power capacity|