German industrial company Siemens has signed a €200 million contract to supply gas and steam turbines for an integrated utilities project in the southern Omani port city of Duqm in one of the largest such transactions for the sultanate.
The contract to supply the Duqm Integrated Power and Water project (DIPWP) with power generation and digital solution services besides turbines is one of Siemens' largest in Oman, the company said on Tuesday.
"Spanning a period of 25 years, the service contract for the project marks also one of the company’s longest contracts in the oil and gas sector globally," it added.
Oman has been developing its port cities such as Duqm to be hubs for large-scale heavy industrial activities, including a 230,000 barrel-a-day refinery, a joint venture between state-owned Kuwait Petroleum International and Oman Oil Company. The sultanate has made strategic investments downstream to boost revenue streams and also part of its diversification strategy to bring economic development to some of its coastal towns.
The utilities project will have an installed power generation capacity of 326 megawatts as well as 36,000 cubic metres of desalinated water per day, primarily to meet requirements for the planned refinery and petrochemicals complex.
“This is the biggest order ever Siemens achieved in Oman for medium-size gas turbines,” said Jean-Claude Nasr, senior executive vice president, power generation at Siemens in the Middle East and North Africa. "Currently, Siemens supports the generation of more than half of Oman’s power supply, enabling the country to optimise gas consumption."
The DIPWP and associated seawater desalination facility located within Duqm Special Economic Zone are being developed by the Duqm Power Company, a JV between Oman Oil Company and Gulf Energy of Thailand.
“Oman aims to build a robust and diversified energy system that can support its long-term, sustainable economic development," said DIPWP project director Abdullah Al Hashimi.
Last month, multilateral lender Arab Petroleum Investments Corporation headquartered in Dammam provided $100m in construction financing for the Duqm refinery, one of the few such downstream projects to have reached financial close.
Apicorp’s investment comprises $50m of Sharia-compliant and $50m of conventional financing, and is part of a bigger package from a consortium of international and regional banks to help finance the refinery’s construction.