Rollout of Piped Gas Network from 2018

Source: www.gulfoilandgas.com 10/30/2013, Location: Middle East

Oman Gas Company (OGC), the Sultanate’s flagship gas transportation company, has firmed up plans to build a piped gas network in Muscat city that will provide households with natural gas on tap for cooking purposes in place of bottled LPG cylinders.

The initiative, according to OGC’s Chief Executive Officer, Yousuf bin Mohammed al Ojaili, will deliver significant strategic, economic and safety benefits to stakeholders and the country as a whole. “This is a strategic and ambitious project designed to substitute LPG (liquefied petroleum gas) with piped gas, starting with households in the Muscat region,” Al Ojaili told delegates on the first day of the Oman Projects 2013 Forum at Grand Hyatt Muscat.

The project centres on a plan to develop a piped gas system that will deliver relatively cheap natural gas to homes in place of commercially valuable, but heavily subsidised, LPG. According to industry experts, natural gas which currently sells at roughly $5 per million BTU (equivalent to $230 per tonne) is an effective and competitive substitute for LPG, which while commanding a market price of up to $900 per tonne, is offered to consumers at a heavily subsidised price of $60 per tonne.

“The city gas project involves supplying gas to most of the areas of Muscat. We want to do this for many reasons. For one, reliability of gas supply will be improved. For another, there are safety concerns with regard to the transportation of LPG cylinders. Equally importantly, we would like to save this LPG and use it for downstream petrochemical projects,” he said. Significantly, the front-end engineering design (FEED) work on the project is due to kick off in 2014. The network itself will be rolled out in zones within the capital region starting from as early as 2018, he said.

Asked about the economics of implementing the project, given especially the high upfront capital costs involved, Al Ojaili said: “There’s no doubt the project has economic benefit. We have done the economics. The government too is very much interested in these economics. Even if you take the current price per BTU of LPG sold through the gas cylinder, the piped gas project is still attractive, not only because of natural gas sales, but because you remove subsidy (from LPG) and sell it at international prices.”

Predominantly government-owned OGC owns and operates much of the country’s domestic gas transportation network encompassing 2,300 km of pipelines that provide natural gas as fuel and feedstock to Oman’s power and water plants, as well as industrial and petrochemical consumers in Muscat, Sohar, Salalah and elsewhere.


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Related Categories: General  LNG Carriers  LNG Terminal  Natural Gas Storage  Oil and Gas Pipeline  Oil Storage  Railways  Tank Truck  Tankers 

Related Articles: General  LNG Carriers  LNG Terminal  Natural Gas Storage  Oil and Gas Pipeline  Oil Storage  Railways  Tank Truck  Tankers 


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