MUSCAT -- Energy major BP hopes to award a number of major contracts linked to the first phase development of its massive tight-gas field in Block 61 as soon as the all-important agreement on commerciality is reached with the Omani government before the end of this year.
Contracts worth potentially hundreds of millions of dollars are up for grabs when commercial development of BP's Khazzan gas field begins in earnest early next year.
Phase 1 of the project, billed as possibly the world's largest tight-gas development, will see the establishment of a huge gas plant with a capacity to process one billion cubic feet (bcf) per day of gas.
In addition to the drilling of around 300 wells during this phase, investments will also be made in the construction of hundreds of kilometres of gas gathering pipelines, a 60km export pipeline, wastewater treatment facilities, and other infrastructures.
"We hope to be able to award the large contracts very shortly after the declared commerciality," said Daniel Blanchard, Vice-President Operations and Country Manager -- BP Exploration (Epsilon) Limited.
"BP is very optimistic about a deal being signed before the end of this year, and we continue to get very good cooperation from all of the (parties) concerned," Blanchard stated in comments to the Observer.
The eagerly awaited commercial agreement between BP and the Omani government will help unlock the prodigious potential of the Khazzan-Makarem field in Block 61, estimated at 100-150 trillion cubic feet (TCF) of gas in place. This bonanza in much-needed feedstock for Oman's burgeoning electricity and water sector, as well as its rapidly expanding petrochemicals industry, is trapped in tight rock at depths ranging from 4,500-5,000 metres below ground, and thus far more expensive to produce in comparison with conventional gas.
According to Blanchard, the front-end engineering design (FEED) for key elements of the Khazzan project is currently underway. "As soon as commerciality is declared, we will give the final design package to the new EPC (Engineering-Procurement-Construction) or EPCM (Engineering-Procurement-Construction-Management) contractors," he said.
Targeted for development in the first phase is the Khazzan field, which is located in the south of the Block and covers a surface area of 1,544 sq km.
At the heart of the Khazzan project is a Central Processing Facility with a designed throughput of 28.3 million standard cubic metres / day (1 bcf/day) of gas, constructed in two identical trains each of 14 million standard cubic metres/day capacity.
Also envisaged is a substantial Gathering Wells and Export System (GWES) accessing the Barik and Amin reservoirs. These will collect and deliver the multi-phase fluids from the well-sites to the Central Processing Facility via a gathering network in excess of 400 kilometres. Other associated infrastructures required to be developed include BP operations bases, drilling camps, contractor compounds, residential complexes, power distribution and telecom services, roads, and waste handling facilities.
Commercial gas production from the Khazzan project is targeted during 2017. Total investment over the 30-year contractual timeframe of the project is estimated at $15 -- 20 billion.
© Oman Daily Observer 2013
