OMAN: Strapped for gas
Dolphin supplies are scheduled to arrive in Oman in early 2008, when the first flush of Qatari gas flows through the Maqta-Al-Ain pipeline into the sultanate. Though significant, the 200 million cubic feet a day (cf/d) of gas will only provide partial relief to the sultanate's looming gas shortage.
Muscat has looked at importing gas from other neighbours, including Iran, but its main focus is on a crash programme to develop its own fields with the help of international oil companies (IOCs). In late December, the quest to find more gas took a significant step forward when the UK's BP signed a production sharing agreement to develop two gas fields in the interior. The Khazzan and Makarem fields west of Saih Rawl could hold reserves of 20 trillion-60 trillion cubic feet (tcf), although how much can be recovered from the tight gas reservoirs remains to be seen. Initial production is set at 300 million cf/d, rising to 2,000 million cf/d.
The additional supply is needed. According to the Ministry of Oil & Gas, demand in the sultanate will reach 3,839 million cf/d by 2010, well above planned supply of 2,659 million cf/d. In 2006, the sultanate only just managed to scrape by. 'Normal gas demand growth is 5 per cent,' says ministry undersecretary Nasser Khamis Ali al-Jashmi. 'But there was a step change in 2006 when the third liquefied natural gas [LNG] train started up.' Gas consumption averaged 2,472 million cf/d last year, just below supply of 2,542 million cf/d and well short of expected demand of 3,030 million cf/d.
Consuming an estimated 1,340 million cf/d, the sultanate's three LNG trains use almost half of its annual production.'The [expected] demand was higher than supply in 2006 but we bridged the gap because of a delay in projects,' says Al-Jashmi. 'And the polyethylene plant at Sohar was due to be completed by 2009, but the date is not now realistic.' The sultanate will experience significant demand growth when projects at Sohar industrial port, including an aluminium smelter, methanol facility and fertiliser plant, come on stream in the next two-three years. 'If the polyethylene plant happens, there won't be any more gas-based industries to follow,' says a source involved in the port's development.
The government is relying on international oil companies to help in the search for more supplies. 'You will see more [foreign] entrants in the gas sector in Oman,' says BG Oman spokesman Michael Barron. 'The government thinks competition is healthy and they are after fast-track development to get the gas quickly.' BG Oman operates block 60, originally part of Petroleum Development Oman's (PDO's) block 6 concession. It was one of several IOCs to sign exploration and production agreements with the government in mid-2006 for six blocks.
The sultanate is not alone in its reliance on IOCs to assist in the gas search. Governments across the region, used to producing oil, are looking for outside expertise to support the gas drive. But in the case of Oman, the stakes are, if anything, even higher.
Victoria Robson
Dolphin supplies are scheduled to arrive in Oman in early 2008, when the first flush of Qatari gas flows through the Maqta-Al-Ain pipeline into the sultanate. Though significant, the 200 million cubic feet a day (cf/d) of gas will only provide partial relief to the sultanate's looming gas shortage.
Muscat has looked at importing gas from other neighbours, including Iran, but its main focus is on a crash programme to develop its own fields with the help of international oil companies (IOCs). In late December, the quest to find more gas took a significant step forward when the UK's BP signed a production sharing agreement to develop two gas fields in the interior. The Khazzan and Makarem fields west of Saih Rawl could hold reserves of 20 trillion-60 trillion cubic feet (tcf), although how much can be recovered from the tight gas reservoirs remains to be seen. Initial production is set at 300 million cf/d, rising to 2,000 million cf/d. The additional supply is needed. According to the Ministry of Oil & Gas, demand in the sultanate will reach 3,839 million cf/d by 2010, well above planned supply of 2,659 million cf/d. In 2006, the sultanate only just managed to scrape by. 'Normal gas demand growth is 5 per cent,' says ministry undersecretary Nasser Khamis Ali al-Jashmi. 'But there was a step change in 2006 when the third liquefied natural gas [LNG] train started up.' Gas consumption averaged 2,472 million cf/d last year, just below supply of 2,542 million cf/d and well short of expected demand of 3,030 million cf/d. Consuming an estimated 1,340 million cf/d, the sultanate's three LNG trains use almost half of its annual production.'The [expected] demand was higher than supply in 2006 but we bridged the gap because of a delay in projects,' says Al-Jashmi. 'And the polyethylene plant at Sohar was due to be completed by 2009, but the date is not now realistic.' The sultanate will experience significant demand growth when projects at Sohar industrial port, including an aluminium smelter, methanol facility and fertiliser plant, come on stream in the next two-three years. 'If the polyethylene plant happens, there won't be any more gas-based industries to follow,' says a source involved in the port's development. The government is relying on international oil companies to help in the search for more supplies. 'You will see more [foreign] entrants in the gas sector in Oman,' says BG Oman spokesman Michael Barron. 'The government thinks competition is healthy and they are after fast-track development to get the gas quickly.' BG Oman operates block 60, originally part of Petroleum Development Oman's (PDO's) block 6 concession. It was one of several IOCs to sign exploration and production agreements with the government in mid-2006 for six blocks. The sultanate is not alone in its reliance on IOCs to assist in the gas search. Governments across the region, used to producing oil, are looking for outside expertise to support the gas drive. But in the case of Oman, the stakes are, if anything, even higher. Victoria RobsonThis content is only available to full MEED package subscribers (MEED magazine and MEED.com).
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