Oman and India continue to press plans for a long term deal that would match the former's gas supply with the latter's rising demand.
Marking the most recent progress, top energy officials of the two governments last month in Muscat, Oman, signed an agreement in principal on gas supply terms. Oman agreed to sell India as much as 1 bcfd starting in 1999. Oman Oil Co. Ltd., which is to be responsible for the sultanate's obligations to the project, also was a party to the agreement.
Core to the gas deal is phased construction of a $5 billion subsea pipeline system between Oman and India to support gas sales valued at more than $50 billion during the life of the agreement. Under the current framework, Oman and India aim to complete project financing by yearend 1995, with construction and commissioning of the first phase pipeline system to be wrapped up by mid-1999.
The long term gas deal seeks to mesh Oman's goal of developing high value, long term markets for its gas supply with India's plan to fuel continuing robust economic growth with gas and other fossil fuels.
India's gas demand is expected to grow 15-18%/year through 2000, creating by 2005 gas imports amounting to 4-6 bcf/year. Meantime, discoveries at Barik, Saih Nihayda, and Saih Rawl have boosted estimates of Oman's gas reserves.
PRINCIPAL TERMS
Signing of the Omani-Indian gas supply agreement follows a March 1993 memorandum of understanding in which the two countries agreed to study the feasibility of building a large diameter subsea pipeline to deliver gas to India from Oman and other Persian Gulf suppliers (OGJ, Mar. 22, 1993, Newsletter).
Despite the technical issues raised by the proposal-not the least of which is how to lay large diameter pipe in water as deep as 3,500 m-the study concluded late last year that construction is feasible.
As now conceived, the Oman-India gas pipeline will be built in two phases.
In the first phase, a 24 in., 1 bcfd line is to be finished by July 1999. Major first phase components include an onshore pipeline from Central Oman to the Omani coast, a compressor station designed to boost line pressure to 6,000 psi, and a 1,130 km subsea pipeline across the Arabian Sea to India.
A second 24 in. subsea pipeline is to start up by 2001.
Oman and India estimate the cost of the project's first phase gas handling and transmission facilities at $2.7 billion and total project cost at $5 billion.
The government of Oman since the 1980s has evaluated proven and developing gas technologies and studied world markets, seeking opportunities to sell large volumes of gas.
Oil & Gas Journal lists Oman's gas reserves at 20 tcf.
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