UK oil major BP has signed an agreement with the Omani government to carry out a second development phase on the onshore Khazzan tight gas field.

The deal extends the Block 61 exploration and production-sharing agreement (EPSA) of the licence area by an additional 1,000 square kilometres to the south and west of the existing 2,700 square-kilometre area.

The development of the new area is subject to final approval by the government and BP, which is expected in 2017, the energy firm said. Completion of phase two is targeted for 2020.

BP is the operator of the Block 61 concession with a 60 per cent interest, with state-owned Oman Oil Company Exploration & Production (OOCEP) holding 40 per cent.

Oman is developing the Khazzan field – one of the largest unconventional gas fields in the Middle East – to meet rising demand for gas driven by its growing population and expanding industrial sector.

The Omani government gave BP the green light for the first phase of the development in December 2013 and the joint venture is aiming to complete the work by late 2017.

Phase two will expand production capacity from the initially-planned 1 billion cubic feet a day (cf/d) to a target of 1.5 billion cf/d, which BP says is equal to about 40 per cent of the sultanate’s current gas production.

The second phase is likely to include an expansion of the central processing facility (CPF). The phase one CPF is being built by a joint venture of UK’s Petrofac and the Athens-based Consolidated Contractors Company (CCC), which won a $1.3bn engineering, procurement and construction (EPC) contract in February 2014.

In June 2015, MEED revealed that BP had awarded contracts to Omani companies to install export pipelines.