Oman’s Ministry of Oil and Gas expects to sign the heads of agreements on a major onshore gas development with UK oil major BP by September.

The signing will be the next step towards the development of the $15bn-20bn Khazzan tight gas project, on which BP is currently prequalifying engineering, procurement and construction (EPC) bidders.

“Negotiations with BP have been progressing very well. In fact, we are in the last stages of discussions on this front. We are confident about having a heads of agreement with BP… by August, if not by September,” Shaikh Ali bin Thabit al-Battashi, adviser to the Ministry of Oil and Gas, told the Oman Daily Observer.

The proposed plant is expected to produce about 1 billion cubic feet a day (cf/d) of sales gas from 275 to 325 wells drilled in the field. The initial phase of development in Block 61 will target approximately 7 trillion cubic feet of recoverable resource.

BP expects to sign the final agreement with Muscat in 2013 and start production at Khazzan in late 2016 or early 2017.