In addition to increasing reserves and production, Oman would like to enlarge its existing pipeline network and is using foreign construction companies to do so. In 2002, contractors completed two lines to connect the reserves in the middle of the country to the coast. One cost $124 million and connects with Sohar. The other cost $180 million and connects with Salalah. There is also an older 500-mile gas trunk line connecting the central fields with power plants and the processing facility of the Oman Liquefied Natural Gas Company (OLNGC), a consortium whose shareholders are the Omani government (51 percent), Shell (30 percent), Total (5.54 percent), and Korea LNG (5 percent), Mitsubishi (2.77 percent), Mitsui & Co. (2.77 percent), Partex (2 percent), and Itochu (0.92 percent). Oman is one of the participants in the $3.5 billion Dolphin project being led by Dolphin Energy Limited (DEL, a joint-venture between the UAE government, Total, and Occidental Petroleum). The goal is to link the gas networks of Qatar, the UAE, and Oman. Under a deal reached in March 2003, OGC began supplying gas to DEL in the fourth quarter of 2003. An agreement signed in September 2005 calls for the pipeline to reverse direction in 2008, as had previously been anticipated. Oman will then import 200 million cubic feet per day (MMcf/d) from DEL.
LNG constitutes a large part of Oman s plan to develop its natural gas sector, and the country is investing heavily in it. Oman s LNG program is being coordinated by OLNGC. In 2004, Omans total LNG production was 324 Bcf. Since 2000, production has been evenly split between between two liquefaction plants (commonly referred to as trains) located at Qalhat, each with a capacity of around 170 Bcf per year. A third train with the same capacity began commercial operation in January 2006. It is a joint-venture between the Omani government (56 percent), ONGC (37 percent), and Union Fenosa (7 percent). There have been preliminary discussions with India over the possibility of that country taking an equity stake in a possible fourth train. The viability of the project depends on the number of future customers for the countrys gas. At present, the three Qalhat trains are operating at capacity. Union Fenosa has a 20-year contract for half of the third trains output. Other major LNG purchasers are Kogas (South Korea), Daghol Power (India), and Osaka Gas (Japan). Occasional spot cargoes also are delivered to Europe and the United States
In 2003, Omans installed power generating capacity was estimated at 2.9 gigawatts (GW). With the exception of some very remote villages, the entire country is electrified. Like other Gulf states, Oman faces growing demand for electricity due to population growth, industrialization, and rising incomes. Consumption is now increasing by 4-5 percent a year, and the government forecasts that electricity demand will be 70 percent higher in 2015 than it is today. To meet this challenge, Oman has allowed the private sector to take on a growing role. The Ministry of Electricity and Water (MEW) continues to play a role as a regulator. The MEW also remains responsible for distribution. In July 2003, the MEW announced that it was setting up a new company, the Transmission and Distribution Company (TRANSCO), that would oversee the generation and supply of electricity in the country. It also announced that it would be selling 65 percent of the new firm to private investors. There have been several notable privatizations. The 1996 sale of a 90-MW power station in Al-Manah to Trachtebel (Belgium) produced the regions first independent power project (IPP). In 2001, a deal to sell a 200-MW plant in Salalah to Dhofar Power Consortium (DPC) went through. It was the first deal in the region to cover generation, transmission, distribution, billing and collection. As part of the contract, DPC is to improve the generation and distribution facilities. Oman has also agreed to the establishment of a number of new IPPs. In 2000, it agreed to plans to build the 280-MW al-Kamil power plant at al-Sharqiya. Both the Barka and al-Kamil plants are fuelled by on natural gas, and began operation in 2003. In addition, the U.S. firm Public Services Enterprise Group (PSEG) completed work on a 200-MW integrated power facility in May 2004, which supplies the Dhofar region. A 140-MW plant in Qarn Alam was completed in mid-2004, owned by Bharat Heavy Electrical (BHEL) of India.