desalination-industries-in-oman-industry
Published

December 2016

Analysis of the Desalination Industry in Oman - Water Consumption, Production by Desalination, Power Consumption, and New Technologies in Water Production & Energy Efficiency, and Trends (2016 - 2021)

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Oman has a comparatively smaller population, lower level of affluence, small reserves of hydrocarbons, and astonishingly high levels of unemployment. However, this only increases the need for economic diversification. The country has negligible amounts of groundwater, and the insignificant rainfall is immediately vaporized in the high temperatures in the country. The population of Oman has been increasing by no less than 2% per annum. Consequently, water consumption, and hence demand, is directly proportional to the rate of economic diversification. Being an island country, Oman is ideal for desalination. With a population of around 3.3 million, Oman is growing at almost 5% per annum. The desalination market in Oman is worth USD XX.XX billion as of 2016, and is expected to expand at the rate of XX% over 2016-2022.

Drivers

The depleting natural precipitation and ground-water levels and increasing population are the major drivers of the sector in the region. A continued effort at increasing diversification of government income from hydrocarbons is another factor that has led to an increase in construction projects, industries, manufacturing plants, etc., leading to more demand for fresh water. Moreover, the government is supporting and encouraging the establishment of desalination plants to meet the nation’s demands.

Restraints and Challenges

The biggest challenge of desalination is the cost. As per a study, the cost of desalinated water per meter cube was USD 1.04, 0.95 and 0.82 for MSF, MED, and RO, assuming a fuel cost of USD 1.5/ GJ. Moreover, energy accounts for approximately three-fourths of the supply cost of desalination. Transportation cost is also added to the overall cost, making desalination a very costly process. Another negative impact of desalination is on the environment with the treatment of brackish water leading to pollution of fresh water resources and soil. Discharge of salt on coastal or marine ecosystems also has a negative impact.

Opportunities

In 2009, the average per capita water consumption in Oman beat that in Europe and Japan with daily consumption exceeding average consumption by more than 60 liters a day. Subsidies to households cost Oman no less than USD 4.67 billion per year as of 2015. It is expected that this will be revoked in time to better manage resources. The country is attracting new investments in desalination plants by purchasing power and water for its citizens through the off-taker government agency called Oman Power and Water Procurement (OPWP).

Key Developments

  • Two new plants are being planned in Barka (capacity: 281,000 m3/day) and Ghubra (capacity: 250,000 m3/day). Seven consortiums made up of leading water utility companies have bid on these projects, according to the governing authority OPWP (Oman Power and Water Procurement Company). The bid is being overseen by a wholly government-owned company, Nama Group (a subsidiary of The Electrical Holding Company). These new IWPs are scheduled to begin operating in 2018. This OPWP is being advised by Fichtner (Technical Advisers), Project Financial Solutions Limited (Financial Advisers), and DLA Piper (Legal Advisers).
  • Additionally, three large-scale projects in the Sultanate are in the pipeline. Together, these will add another 240,000 m3/day to the country’s water production capacity. The largest of these, with an output of 100,000 m3/day, will be located in Salalah adjoining IWPP Sembcorp near Taqah. For this project, Pricewaterhouse Coopers will be providing financial advisory, Curtis, Mallet-Prevost, Colt & Mosle will provide legal advising, and Spanish engineering giant Ayesa will provide technical advising.

About the Market

 PESTLE Analysis (Overview): Macro market factors pertinent to this region

 Market Definition: Main as well as associated/ancillary components constituting the market

 Key Findings of the Study: Top headlines about market trends & numbers

Market Dynamics:

  • Drivers: What are the key factors driving growth in the market?
  • Restraints: Most relevant threats and restraints that hinder the growth of the market
  • Opportunities: Sectors of high return or quick turnaround on investment
  • Market Concentration: Porter’s 5 Forces Analysis quantified by a comprehensive list of parameters

 Chain Analysis:

 Competition:

  • Market Share Analysis: Top players in the market (by value and volume)
  • Company Profiles: Pertinent details about leading, high growth, and innovation-motivated stakeholders with contact, operations, product/service offerings, financials, and strategies & insights
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