Substantial discoveries of deep gas in Central Oman during the last 12 months have put one of the Arabian Peninsula's smaller producers on the path to becoming a liquefied natural gas exporter.
A preliminary study by Shell International Gas Ltd. shows a 5 million metric ton/year LNG export project is potentially viable based on new gas/condensate strikes in the Qarn Alam area of Petroleum Development Oman's concession area.
Now, Shell has agreed with the Omani government to conduct a more detailed study that could lead to full implementation of an LNG project before the end of the decade.
Gas in Oman is owned by the state, although the new reserves have been found by Petroleum Development Oman working on behalf of the government. The state holds a 60% interest in PDO, Royal Dutch/Shell Group 34%, Total 4%, and Partex 2%.
WHAT'S NEXT
Under an agreement with the government, Shell will provide technical and commercial advice and service for the detailed study. It also will draw up an agreement between the government and private shareholders for development of the project.
As part of the detailed study, full appraisal of the new reserves will be undertaken. The gas lies at 13,100-14,760 ft in the Haima Andan formation. Before the deep drilling program began, Oman had booked at 9.9 tcf of reserves, enough to meet Oman's domestic requirements well into the next century.
The LNG project alone would require 5 tcf of reserves. PDO's drilling program is expected to prove substantially more than that.
PDO, on behalf of the government, has been drilling for deep gas with a single rr since the beginning of last year. The new appraisal program will require two more rigs and more seismic crews.
In the downstream part of the LNG project, the government will take only a 51% interest. Shell, Total, and Partex will take the remaining 49%, but the group recognizes that shares later will be offered to Japanese companies.
The downstream detailed work will refine plant and shipping concepts and determine commerciality of the project.
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