The UK/Netherlands’ Royal Dutch Shell has signed a memorandum of understanding (MoU) with the government of Oman covering upstream gas exploration and development, a gas-to-liquids (GTL) plant in Duqm, liquified natural gas (LNG) and renewable energies.

Under the agreement, Shell will operate an upstream project with Total and Oman Oil Company (OOC) as partners. It will also operate a GTL project in partnership with OOC.

Total and Shell plan to develop natural gas discoveries in the Greater Barik area on onshore Block 6. Total will hold a 25 per cent share and Shell 75 per cent before a possible state back-in.

The initial object is to reach gas production of around 500 million cubic feet a-day (cf/d) with the potential to reach 1 billion (cf/d) at a later stage.

Total says it will use its equity gas entitlement as feedstock to develop a regional hub for LNG bunkering services to supply LNG as a fuel to marine vessels.

This will involve building a small-scale modular liquefaction plant in Sohar port. The plant will comprise a train of around 1 million tonnes a year and offer the flexibility for expansion as required by the development of the LNG bunkering market.

Shell and Total submitted expressions of interest in Petroleum Development Oman (PDO)’s first renewable energy project in the sultanate earlier this year.

The scheme involves the development of a 100MW-capacity solar photovoltaic plant in Amin in southern Oman. Bids are due to be submitted on 24 June.