The progress of the north-south linkage stages of the Gulf states power grid has accelerated, says Saudi electricity minister Hashem Al-Yamani, following the setting up of a special agency in Damman to oversee the project. It is now expected that the first stage of the link joining Saudi Arabia with Qatar and Bahrain will be completed by 2006, in line with commitments made by all the Gulf state leaders at last year’s Gulf Co-operation Council summit, the first concrete form of an idea first mooted nearly twenty years ago.
However, creation of the northern links has been delayed by the decision to undertake an update, which will not be completed until mid-2003, of the most recent feasibility study, published earlier this year. The interconnection project is now being scheduled for implementation between 2004 and 2010. The new study will carry out a technical and economic analysis, draw up an interconnection agreement and decide an implementation strategy.
The first study of a grid to interconnect the six Gulf states was carried out in 1986, and updated in 1990-92. It estimated the total cost of phase one of the project at $1.348 billion. This latest update will determine how the project will be financed, and how its cost will be shared by member states. Earlier studies recommended that the capital structure of the project be 35 per cent equity and 65 per cent debt, with the equity provided by government and the debt through private sector participation.
Construction of phase one involves the interconnection of Kuwait, Saudi Arabia, Bahrain and Qatar and is expected to be operational by the end of 2007. Phase two will integrate the independent power systems of the UAE and Oman and will allow the connection of the UAE grid to the GCC North system through Tarif, and to Oman through Al Ain. The implementation of phase three of the project is conditional on internal integration of the networks in the UAE, but will complete the interconnection of the GCC North and South grids in several stages.