THE expansion of Syria's natural gas sector is taking centre stage as the country steps up exploration and development work to help meet increasing domestic needs and compensate for falling production from ageing oilfields.
Efforts are already paying off, with state-owned Syrian Petroleum Company (SPC) making a significant gas find and Croatia's Ina developing a number of fields.
The heightened pace of activity underpins the Oil Ministry's plans to increase gas output by more than 50% by 2009 from the current 22 million cubic metres per day.
Oil Minister Sufian Alao says the SPC find was made last month in Brig, 100 kilometres north of Damascus, with the first well flowing at a rate of 280,000 cubic metres per day.
Initial reserves estimates are 5 billion cubic metres of gas, although this is likely to be revised upwards because the area contains three prospective blocks.
Depending on the results of the next two planned probes, SPC may widen exploration and appraisal drilling to better determine the size of the find.
Gas finds would enable Syria to delay becoming a net crude importer in the next decade because of the irreversible decline from its oilfields.
"We have plans to add between 13 million and 15 million cubic metres per day to our gas production by 2009. We also hope to add more production in future from new discoveries,"Alao says.
Half of Syria's gas production is non-associated, with the rest produced alongside crude, while only 18.5 MMcmd of total output is sold to the
national grid.
The bulk goes towards meeting demand for power generation, while about 5.5 MMcmd is reinjected into mature oilfields to help maintain production. Syria also flares up to 6% of its gas production.
SPC's plans to add new gas capacity are well under way. Russia's Stroytransgas is building a processing plant near the ancient city of Palmyra as part of the Middle Area Gas Project, which is split into the South Middle Area Gas Project and North Middle Area Gas Project (NMAGP).
The plant will receive gas from the Abu Rabah, North al-Faid and Qomqom fields, adding a combined 6 MMcmd to Syria's gas production by 2009.
The Oil Ministry is also in the process of issuing an international tender for a new gas processing plant that will add a further 3 MMcmd under the NMAGP.
Foreign players are also helping to boost production capacity. Ina has launched an engineering, procurement and construction tender for the development of two gas fields and the building of an associated treatment plant in Palmyra.
Ina's Syria manager Khouchaba Nissan says work involves developing the Jihar and Mahr fields in the Hayan block, as well as building a 3.5 MMcmd treatment plant. An EPC award is expected next year, with first gas from the twin fields due in early 2009.
In the same block, Ina's Palmyra gas field is due on stream by the end of the year, yielding 500,000 cmd.
Supplies will be pumped 40 kilometres east to the Arak treatment plant owned by SPC, which has a 50% stake in the Hayan block. Combined production from all the Hayan fields is expected to reach 5 MMcmd in future.
Alao says a further 2 MMcmd will come from the Ash Shaer and Cheriffe fields operated by US oil company Marathon, which is selling its 90% stake in the twin fields to Petro-Canada.
The proposed sale comes months after Marathon ended a long-running dispute with Syria by signing a 25-year production sharing agreement to develop the gas fields, which have total reserves of 1.7 trillion cubic feet.
Marathon discovered the fields more than 20 years ago, but a dispute soon erupted between the US group and SPC over development terms and gas prices, preventing progress.
Petro-Canada's investment in Syria's gas sector is significant. Last year, the company sold its stake in the country's leading oil producer Al-Furat Petroleum to a joint venture of India Oil&Natural Gas Corporation and China National Petroleum Corporation. Al-Furat is faced with an irreversible decline from its fields.
It remains to be seen whether Petro-Canada's move is a vote of confidence in Syria's gas sector or an opportunity to buy Marathon's stake on the cheap. Marathon has been under pressure to pull out of the country by the US government, which views Syria as a sponsor of terrorism.
Other companies are also joining the search for gas. London-listed Gulfsands Petroleum has embarked on a deep drilling campaign with the spudding of the Tigris-1 exploration well, confident of making discoveries despite disappointing results from its Souedieh North probe.
In September, the company spudded the first of threedeep wells in its Block 26 concession, close to producing areas in the north-east. Each well has a total depth of 18,000 feet, will cost about $16.5 million and take three months to complete.
Gulfsands' boss in Syria, Mahdi Sajjad, says it is only a matter of time before a find is made on the 11,000 square kilometre block, with the company having already identified more than 30 prospects.
He says the company learnt a great deal from Souedieh North, even though it did not produce oil or gas."There is a lot of oil out there but it is tar and very heavy. It has taught us that the area has pay zones,"he adds. Gulfsands suspended the well but is using the geological data to help drill Tigris-1, which will be the first of the three probes targeting the gas-prone Paleozoic depths.
Any gas produced will be sold to the domestic market, where demand is increasing because of a booming population and a healthy economy resulting from market reforms by President Bashar al-Assad. At the same time, Syria is planning to launch its first offshore licensing round in the Mediterranean Sea, opening up a new exploration frontier that is likely to attract keen interest from foreign players.
Gas finds in Egypt and Gaza have attracted foreign investment to the Mediterranean play and Damascus hopes to cash in on some of that zeal.
© Upstream 2006
