The Oman ministry of electricity and water started talks with a consortium to construct the country’s second private sector power plant. The Dhofar consortium, led by PSEG Global, and includes Royal Dutch/Shell and a number of local contractors, has received a letter of intent inviting it to negotiate the construction and operation of the 200 MWe station at Salalah.

The final concession agreement could be signed by April 2000, with the plant entering service two years later. The consortium’s bid is valued at around $223 million.

The contract will involve construction of the plant in the southern city of Salalah and then operating it. The station will have dual fuel capacity so that it can operate burning oil if natural gas is not available by the time it is commissioned. Bids are expected later this year for a contract to build a gas pipeline to supply Salalah.

Salalah will be the second private sector project in Oman. The first plant, the Manah power station, received approval to triple its capacity to 270 MWe earlier this year.