MUSCAT, FEB 14

Musandam Power, which owns and operates the sole gas-fired Independent Power Project in Musandam Governorate, says it can now fall back on gas supply from the regional Dolphin network whenever supplies from the nearby Musandam Gas Plant runs short.

This backup arrangement, reached with Dolphin Gas following the intervention of the Ministry of Energy and Minerals, has helped Musandam Power to ease its dependence on expensive and emission-intensive diesel to power its plant, according to a top official of the Omani power generator.

“Gas available from the Musandam Gas Plant (MGP) is not fully sufficient to cater to Musandam IPP requirements,” said Mohammed al Ruwaidhi, Chairman – Musandam Power.

“The Ministry of Energy & Minerals (MEM), through OQ, arranged to supply Dolphin Gas to compensate for the gas shortage from MGP. Due to this additional gas availability, dependency on diesel is significantly reduced and the plant in future months is expected to continue to operate mostly on gas fuel,” he stated in the company’s newly published Annual Report for 2023.

Publicly traded Musandam Power – majority-owned by Oman’s integrated energy group OQ – operates a 120 MW capacity power plant at Tibat in the Wilayat of Bukha. Natural gas as feedstock for the plant is supplied by the Musandam Gas Plant, also owned by OQ Group. The power plant’s dual fuel capability, however, enables Musandam Power to also operate on diesel in the event of gas supply contingencies.

Welcoming the Ministry’s intervention in facilitating the Dolphin fallback arrangement, the Chairman added: “In 2024, the company is optimistic about the challenges related to natural gas availability, a significant contrast from the issues faced up until 2022. Collaborative efforts with the government, which have proven effective, contributed to a more stable situation.”

Those “issues” stem from insufficient gas supplies from the Musandam Gas Plant, the result of declining reservoirs in the offshore fields of Block 8 operated by a subsidiary of OQ Upstream.

To “counteract” the gas shortage from the Musandam Gas Plant, the Ministry – through OQ – arranged for Dolphin Gas supply in November 2022, said Al Ruwaidhi.

“This strategic initiative not only addressed the immediate challenge but also resulted in a notable reduction in diesel dependency. During the year 2023, the plant predominantly operated with 94% on gas fuel, with only 6% utilizing diesel. The company expects this positive trend to persist in 2024, despite occasional reliance on diesel prompted by inconsistent gas supply, the company maintains a high level of confidence in the plant’s reliability,” he added.

Under a 25-year gas sales agreement signed in 2005, the multinational Dolphin Energy network supplies 200 million standard cubic feet (MMscfd) of Qatari natural gas to Oman via a subsea pipeline.