Oman is looking into building solar and wind power plants to meet rising demand as the sultanate faces a gas shortage, a government energy official said.

"We are now turning to renewable energy like wind and solar to reduce the reliance on gas as the major fuel for power stations," Zahir Al-Suleimani, director general of projects at the Public Authority for Electricity and Water told Reuters in an interview.

"Electricity consumption is increasing by 15 percent annually and water by 10 percent due to industrial and infrastructure projects as well as domestic use."    

Gas demand is 13.6 million cubic metres per day and will increase to 20 million by 2015, according to Oman Power and Water Procurement Company figures.

"The government will need to import gas to meet that demand, that's the reason it makes sense to go for renewable and environmental friendly energy as alternative," Al-Suleimani said.

The non-Opec oil exporter needs to increase gas supplies by 48 percent to 7.2 billion cubic metres (254.3 billion cu ft) a year by 2013 to fuel power and desalination plants.

An energy official said in May that Oman aims to use coal to meet 20 percent of its energy needs by 2020 to reduce reliance on gas, and is setting up a new firm to buy coal to fire a planned 1,000 megawatt power station.

The sultanate has awarded about $5.5 billion worth of projects so far this year as it looks to develop infrastructure and the economy. Among the projects was a contract for the $1.17 billion Muscat airport terminal last month. The government plans to spend a total of $16.5 billion on projects in 2009.

Oman plans to drastically reduce its reliance on oil exports and double its income from industrial activities in the coming decade as the Gulf region strives to diversify away from crude export revenues. - Reuters