|25 August, 2019

Natural gas emerging as major contributor to Oman’s economy

The total reserve of natural gas is estimated to be 25tn cubic feet in the Sultanate

Image used for illustrative purpose. Oil rigs extract petroleum as the price of crude oil rises to nearly $120 per barrel, prompting oil companies to reopen numerous wells across the nation that were considered tapped out and unprofitable decades ago when oil sold for one-fifth the price or less, on April 25, 2008 in the Los Angeles area community of Culver City, California.

Image used for illustrative purpose. Oil rigs extract petroleum as the price of crude oil rises to nearly $120 per barrel, prompting oil companies to reopen numerous wells across the nation that were considered tapped out and unprofitable decades ago when oil sold for one-fifth the price or less, on April 25, 2008 in the Los Angeles area community of Culver City, California.

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Muscat - As the heavy investments in Omani gas fields in the past few years have boosted the country’s gas production, natural gas is emerging as a significant contributor to the growth of Oman’s economy, the Central Bank of Oman (CBO) said.

Oman’s natural gas production jumped by 12.5 per cent to 43,750mn cubic metres in 2018. The total reserve of natural gas is estimated to be 25tn cubic feet (with 22 gas production fields) in the sultanate, the CBO said in its annual report released on Wednesday.

Out of the total estimated reserves, the highest of about 54 per cent is with Petroleum Development Oman (PDO), followed by BP Khazzan and Ghazeer with about 41 per cent and the remaining of 5 per cent with other companies, the figures showed.

‘Natural gas is emerging as a significant player in the Omani economy, especially with Khazzan-I coming into full stream,’ the CBO said. In addition, it said Dolphin Energy Company contributed to gas availability in Oman by importing 5.4mn cubic metres of gas per day.

On the back of increased gas production, Oman’s total LNG exports also recorded a massive jump of about 19 per cent to 10.2mn metric tonnes during 2018 compared to 8.6mn metric tonnes in the previous year. Oman LNG last year exported 6.9mn metric tonnes, while 3.3mn metric tonnes of LNG were exported by Qalhat LNG. The export of gas condensate stood at 0.239mn metric tonnes.

‘The new projects in the oil and gas industry remain a critical vent for maintaining the current production level, given the higher attrition rate in this sector. Therefore, Oman has been investing and collaborating with companies/operators for new projects in the oil and gas sector,’ CBO noted.

The report added that the new projects made rapid progress during last year. PDO’s two mega projects, viz. Rabab Harweel Integrated and Yibal Khuff Project attained considerable progress. The second phase of Saih Nihayda and Kauther projects came on stream in 2018, while Occidental Oman signed a new exploration and production sharing agreement in Block 72.

‘The second phase of the giant Khazzan field also made good progress and is expected to go on stream in 2021, delivering an additional 0.5bn cubic feet of gas per day,’ CBO said.

The World Bank also expects Oman’s economy to continue to improve during 2019 and 2020 due to several factors, notably the recovery of hydrocarbon sector and the increasing production from the Khazzan gas field, according to a report released earlier this year.

The CBO further said that Oman LNG has started a new power project that will deliver increased energy efficient electricity needed for LNG facility. In addition, Oman LNG is growing capacity through a debottelencking project currently at the design stage.

The central bank’s annual report mentioned that CC Energy Development completed engineering, procurement, construction and startup of the Ulfa phase 2 central processing facility with capacity of 11,000 barrels per day. Ulfa phase 3 will expand the central processing facility to a capacity of 20,000 barrels of oil per day.

 
Muscat Daily staff writer

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