South Korea firm to build $200m Sharqiyah desalination project

MUSCAT, JULY 25 - South Korean engineering firm Doosan Heavy Industries & Construction Co, billed as the world’s largest builder of desalination plants, has announced that it has won a contract to construct a new water desalination project at Al Aseelah in South Al Sharqiyah Governorate. The announcement came at the signing of project finance agreements covering the financing of the estimated $203 million cost of the scheme. Last December, the Oman Power and Water Procurement Company (OPWP) — the sole buyer of power and water output under the sector law — named Al Asilah Desalination Company as the winner of the licence to design, finance, build, operate and maintain a new Independent Water Project (IWP) at Aseelah. The contracted capacity of the plant is 80,000 cubic metres /day (equivalent to 17 million imperial gallons per day MIGD). Japanese engineering giant JGC Corporation is a 75 per cent shareholder in the project company, Al Asilah Desalination Company. Oman-based United Infrastructure Development Company LLC has a 20 per cent stake, while Doosan Heavy Industries & Construction Co Ltd holds the balance 5 per cent. Significantly, around 60 per cent of the project cost will be funded through project financing provided by a consortium of Japanese banks, notably MUFG Bank Ltd, Sumitomo Mitsui Trust Bank, Limited and Shinsei Bank Limited. Project finance agreements were signed on July 11, 2018. Loan insurance for the Al Aseelah IWP is being provided by Nippon Export and Investment Insurance (NEXI), marking the first time that NEXI has provided insurance coverage for a seawater desalination plant project. “The selection of a consortium of JGC and United Infrastructure Development Company as the successful bidder is the result of positive evaluations of JGC’s ability to apply its engineering knowledge and proven capacity to provide innovative ideas that enable the reduction of energy required to operate and its ability to keep the unit cost of the water produced low.  The construction work will be carried out by a South Korean firm, Doosan Heavy Industries and Construction Co Ltd, which is experienced in the construction of reverse osmosis membrane seawater desalination plants in the Middle East and other parts of the world,” said JGC Corporation in a statement. The Aseelah IWP is due to come on stream by April 2021. Conrad Prabhu