Extended Wartsila O&M Agreement Will Maintain Critical Power
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This news is classified in: Traditional Energy Power Generation

Oct 13, 2022

Extended Wartsila O&M Agreement Will Maintain Critical Power Supply to Omani Customers

The technology group Wärtsilä has extended the Operations and Maintenance (O&M) Agreement signed five years ago with Musandam Power Company SAOG (MPC), a power plant owner in the Sultanate of Oman. The three-year extension will enable the Musandam Independent Power Plant (MIPP) to continue meeting all its obligations under the Power Purchase Agreement (PPA) it has with the Musandam isolated grid authorities. It will also ensure a reliable electricity supply for local businesses. The extension was signed and booked in Wärtsilä’s order intake in Q2 2022. There is an option to further extend the agreement by two one-year extensions.

The Musandam isolated grid is entirely dependent on this one baseload plant. The local region is rapidly developing economically and is a popular tourist area with a high demand for electricity. The power plant is, therefore, required to be available on a 24/7 basis except for routine checks and inspections.

The extended O&M Agreement is part of the two active Wärtsilä service agreements with MPC. A 15-year Long Term Service Agreement was signed simultaneously with the engineering, procurement, and construction contract in 2014, which has been complemented with Wärtsilä taking responsibility for operating and maintaining the facility from 2017.

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During its five years of operation and maintenance by Wärtsilä, the plant’s exceptional reliability has enabled MPC to achieve 100 percent of the contracted performance guarantees under its PPA based on the service agreements with Wärtsilä. This reliability has been achieved despite the challenging ambient conditions with summer temperatures reaching 50 degrees C, when the demand for electricity is at its highest.  

The 146 MW facility was delivered under a full engineering, procurement and construction contract by Wärtsilä in 2017. It operates with 15 Wärtsilä 34DF engines operating on natural gas as the primary fuel.

“Electricity demand is expected to grow during the period of the PPA, and a secure supply is essential for meeting Oman’s stringent grid code. The Wärtsilä plant provides this reliability and availability, thanks both to the efficiency of the engines and their professional operation and maintenance support. We value Wärtsilä as a partner we can rely on and trust,” commented Murshid Al-Yarubi, CEO, Musandam Power Company SAOG.

“The initial five-year agreement was successfully completed with good cooperation between Musandam Power Company and Wärtsilä. We have achieved 100 percent of the contracted performance guarantees towards MPC. We are very proud to know that our good cooperation has enabled Musandam Independent Power Plant to meet all performance guarantees under the PPA with the power purchaser Oman Power and Water Procurement Company during this period,” said Alexandre Eykerman, Director, Middle East, Wärtsilä Energy.

Wärtsilä also provides additional services for MPC, including plant security. Remote monitoring of the equipment is carried out from Wärtsilä’s Expertise Centre in Dubai in the United Arab Emirates, and full operational data is analysed to ensure optimal performance and the prevention of outages.

Wärtsilä has worked closely with the Ministry of Labour and local authorities to employ and develop the skills of Omani nationals. The ratio of locally employed personnel under the O&M agreement is now 80 percent, which exceeds the original Omanisation plan and competence development requirements of the Oman government’s labour law.