Oman Energy Storage Project Signed with Chinese Firm -- Jiandao Net
Recently, during Sultan Haitham of Oman’s visit to China, Nama Holding, a subsidiary of the Oman Investment Authority, signed a framework agreement with State Grid International Development Co., Ltd. The agreement plans for the construction of a 1 GW battery energy storage system in Oman, with a contract value of approximately 384.5 million Omani rials, equivalent to roughly $1 billion. During the same period, Oman and China signed 23 investment and cooperation documents, with energy storage being one of the areas covered. The significance of this deal lies not only in its financial scale, but also in the approach and timing of State Grid’s entry into Oman’s energy storage sector.
A $1 Billion Framework Agreement Signed
The physical outline of the project is now clear. The two power stations, each with a capacity of 500 MW, will be located at the Duqm Industrial Station in Oman’s Central Region and at Ibri in the North Al Hajar Governorate in the northwest, specifically at sites associated with the Ibri Solar 3 plant. Both stations will be connected to Oman’s national transmission grid at a voltage level of 400 kV. The functional positioning is straightforward: to release stored electricity when renewable energy output declines or electricity demand rises, thereby helping grid operators manage the variability of solar and wind power and enhancing the reliability of power supply. At present, this is a framework agreement intended to establish cooperation and to assess and develop the two facilities. Specific details regarding battery technology, storage duration, equipment procurement, and construction schedules have not yet been disclosed. The agreement carries strong signaling value, but its execution certainty remains limited.
From Power Transmission Equity to Energy Storage Development
The intersection between State Grid Corporation of China and Oman’s power grid did not begin with energy storage. In 2020, State Grid completed the acquisition of a 49% stake in Oman Transmission Company, deeply engaging in Oman’s transmission infrastructure. This energy storage framework agreement extends the bilateral cooperation from the equity level of the transmission grid to the investment, assessment, and development of grid flexibility assets. The 500MW energy storage projects in Ibri and Dukum are already in execution, with China Electric Power Technology and Equipment Corporation and NARI Technology Co., Ltd. serving as the general contractors, respectively. These projects systematically apply Chinese technical standards and equipment systems, and achieved energization in July 2026. The Ibri project is positioned as a regional regulation hub to alleviate transmission congestion, while the Dukum project serves as the core stabilizer for the north-south interconnection corridor. State Grid’s role in Oman is shifting from an investment holder of transmission assets to a composite role encompassing technical standards, system integration, and project development. Keywords: New Energy News Network, Energy Storage, International Infrastructure, Middle East
Oman’s energy storage demand is rigid
Why does Oman need 1 GW-scale battery energy storage at this juncture? The answer lies in the structural pressures on its power system. By the end of 2025, the share of renewable energy in Oman’s electricity generation is expected to rise from approximately 4% a few years ago to around 10%, with a 2030 target of 30%. Peak grid demand is projected to grow from 9,431.9 MW in 2026 to 13,967.4 MW, while the target share of new energy installed capacity is set at 45%. Oman Transmission Company plans to integrate approximately 5.7 GW of solar photovoltaic and over 2 GW of wind power between 2027 and 2030. The influx of large-scale variable renewable energy sources has transformed the grid’s need for fast regulation and balancing resources from an optional feature into a rigid requirement. Energy storage is not a nice-to-have; it is a prerequisite for the continued rise in renewable energy penetration.
Gulf states are broadly ramping up energy storage efforts. Saudi Arabia is advancing the world’s largest battery energy storage facility, and Oman’s 1 GW framework agreement is part of this regional trend.
Frequently asked questions
What is the total contract value of the 1 GW battery energy storage system agreed upon by Nama Holding and State Grid International Development?
The framework agreement carries a contract value of approximately 384.5 million Omani rials, which is equivalent to roughly $1 billion. This financial scale underscores the significant investment commitment from both parties for the project.
Where will the two 500 MW power stations for the Oman energy storage project be located, and what voltage level will they use?
The stations will be located at the Duqm Industrial Station and at Ibri, specifically near the Ibri Solar 3 plant. Both facilities will connect to Oman’s national transmission grid at a voltage level of 400 kV to ensure efficient power distribution.
How does the new energy storage agreement extend State Grid's previous involvement in Oman's power infrastructure, and what does this mean for grid flexibility?
The agreement extends cooperation from State Grid's 49% stake in Oman Transmission Company to the development of grid flexibility assets. This shift makes energy storage a rigid requirement for balancing resources, rather than an optional feature, supporting higher renewable energy penetration.