Oman’s oil and gas projects market got off to a strong start to a year that is likely to eclipse 2012 in terms of contract awards.
The sultanate’s oil companies have awarded $545m of major engineering, procurement and construction (EPC) contracts in the first quarter compared with zero in the previous quarter, according to regional projects tracker MEED Projects.
The largest contracts of the first three months of the year were signed on the development of the Abu Tubul gas and condensate field at Block 60, west-central Oman.
Project owner Oman Oil Company Exploration & Production (OOCEP) awarded contracts to Oman’s Gulf Petrochemical Services & Trading (GPS) on the project’s site preparation and flow lines.
OOCEP acquired Block 60 in 2010 after it was relinquished by UK-based BG Group. Drilling started in November 2010 and the company plans to build a 90 million cubic feet a day (cf/d) processing plant and export pipeline at the site. The package for the export pipeline was awarded to Omani group Al-Hassan Engineering in September 2012.
Also in the first quarter, the sultanate’s largest oil and gas group Petroleum Development Oman (PDO) awarded a $45m EPC contract to Egypt’s Petrojet to build a 157-kilometre gas pipeline at the Barik gas field in Al-Wusta governorate, central Oman. Petrojet is expected to complete the pipeline, which will run in a loop from Barik to several block valve stations (BVS), in 2015.
But international EPC contractors will be looking until later in the year when several large contracts are expected to be awarded.
Companies are now preparing to bid for a major project at the Sohar refinery in northern Oman operated by Oman Oil Refineries and Petroleum Industries (Orpic). The Sohar Refinery Improvement project, which Orpic recently renamed from the Sohar Refinery Expansion project, is set to meet growing fuel demand and provide feedstock for the Sohar polypropylene plant, which is running at less than 60 per cent capacity.
Orpic has extended the deadline for bids on the estimated $1.5bn project until 29 April from a previous cut-off date of 11 February, with the contract likely to be awarded in the second or third quarter of the year.
Oman is also expected to award several major EPC contracts on the $15bn Khazzan tight gas development, which the government is planning to carry out through a joint venture with UK energy major BP. Major contracts include the surface processing facility and the gas gathering, wellsides and export system (GWES) facility.
At the start of March, Oman’s Oil and Gas Minister Mohammed bin Hamad al-Rumhy said that he was optimistic a profit-sharing agreement could be hammered out by the end of the month. However, an official announcement is yet to be made.