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BP to Build Natural Gas Processing Plant in Oman

Source: Times of Oman 8/25/2013, Location: Middle East

British oil giant BP is planning to build a large natural gas processing plant to process gas to be produced from its block 61 tight gas fields in north-central Oman. A commercial agreement between BP and Oman government for starting the full-field development of the field is expected to be signed before the end of the year, after both parties signed a heads-of-agreement few months ago.

BP is now carrying out technical evaluation of bids (which was received from potential bidders) and soon will open commercial bids, Nasser bin Khamis Al Jashmi, undersecretary at the Ministry of Oil and Gas, told journalists on the sidelines of launching the Oil & Gas Year Oman 2013.

He said the plant, which is part of an overall development plan, will have a capacity to process one billion cubic feet of natural gas per day, which is the anticipated production from gas-rich Khazzan and Makarem fields in the first phase. "However, we are dealing with a lot of unknown factors here. But based on the current information we have, this would be the expected production from the field."

After signing the provisional pact called heads-of-agreement few months ago, BP and Oman government are in an advanced stage of discussion to sign the final commercial agreement for initiating the full-field commercial development of block 61 tight gas fields, which is expected to be inked before the end of the year. "Now we are discussing the details of the final agreement (with BP), which we hope will be able to sign before the end of the year," added Al Jashmi.

Al Jashmi said there is no change in the development plan or envisaged investment for developing block 61. "So far, around 11 appraisal wells have been drilled by BP and they are continuing with drilling appraisal wells and evaluating the performance, until they make a final investment decision," he added. Few wells have been hooked up through early production facilities and BP is trying to asses the productivity of the wells.

Sources at the Ministry of Oil and Gas earlier said that BP is expected to invest a whooping $20billion-$24 billion for the first phase full-field development of its block 61 tight gas fields. The first phase of the development programme is spread over a 25 year-concession period and aimed at producing 6.7 trillion cubic feet (TCF) of natural gas, which is equivalent to one billion standard cubic feet of gas per day. The first delivery of gas is expected by 2017.

BP is planning to drill 282 wells and the first delivery of gas is expected by 2017. If everything goes well, BP's gas exploration (expected in 2017) will help Oman — which is short of gas for meeting demand from a host of industrial projects — to achieve self-sufficiency in clean energy.

Duqm refinery
Referring to the progress made by the government in building Duqm refinery, Al Jashmi said the front engine engineering design work is going on for the refinery construction. Once that is completed, the government will float a tender to select an engineering, procurement and construction (EPC) contractor for developing the refinery.

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