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PDO to supply up to 200 MW to Oman grid under five-year power deal

MUSCAT: Petroleum Development Oman (PDO) has signed a five-year Power Purchase Agreement (PPA) with Nama Power and Water Procurement Company (PWP) to supply up to 200 megawatts (MW) of generation capacity to Oman's national electricity grid.

The agreement enables Nama PWP to access dispatchable generation capacity from PDO's extensive captive power network, helping to meet rising electricity demand, improve system reliability during peak periods, and reduce the need for investment in additional peaking generation.

“The agreement reflects PDO’s commitment to maximising the value of its power generation assets in support of the Sultanate’s growing energy needs and long-term energy security,” the majority Omani state-owned oil and gas producer said in a statement.

PDO operates one of Oman's largest private electricity systems, developed primarily to serve its upstream oil and gas operations across Block 6. The integrated network comprises 17 gas-fired power plants with a combined installed capacity of around 1,708 MW, supported by a 132-kV transmission network extending approximately 4,300 km across its concession area, as of 2022. The system was designed with reserve margins to ensure uninterrupted electricity supply for critical oil production, enhanced oil recovery (EOR), water treatment and associated industrial facilities.

The PPA effectively monetizes part of this available generation capacity by allowing surplus dispatchable power to be supplied to the national grid when available.

The agreement has been made possible by the 400-kV North-South Interconnector linking PDO's transmission network with Oman's Main Interconnected System (MIS). The interconnection was specifically developed to facilitate power exchange, reserve sharing and more efficient utilization of generation assets across both networks.

According to Oman Electricity Transmission Company (OETC), the interconnection comprises three 400/132-kV injection points at Nahadah, Barik and Suwaihat, each capable of importing or exporting up to 500 MW. Nahadah entered service in 2022, while Barik and Suwaihat were commissioned in late 2023. OETC says the interconnection enhances the security of supply for both networks while delivering additional benefits including capacity sharing, energy trading and lower spinning reserve requirements.

A separate 132-kV interconnection between PDO's Harweel substation and OETC's Dhofar I Wind Farm also allows limited emergency power transfers between the PDO and Dhofar transmission systems.

PDO's power generation capacity is also expected to receive a significant renewable energy boost by the end of 2026. The company is preparing to commission three utility-scale renewable energy projects being developed by OQ Alternative Energy (OQAE) and TotalEnergies.

These include the 100-MW North Oman Solar project at Saih Nahaydah and the 100-MW Riyah-1 and 100-MW Riyah-2 wind farms at Amin and West Nimr, respectively. Together, the projects will contribute more than 330 MW of renewable capacity to PDO's captive electricity network, reducing dependence on gas-fired generation and supporting the company's target of sourcing around 30% of its electricity capacity from renewable energy.