BP and Oman Oil Company signed an agreement to develop the second phase Khazzan natural gas field at an estimated cost of US$16bn
Block 61 will add 1,000 sq km to the original 2,700 sq km area of development, BP said on Sunday in an e-mailed statement.
The project will produce 42.4mn cu/m of gas per day or 40 per cent of Oman’s current output. The new development requires final approval of Oman’s government and BP, which is expected in 2017, the company said.
The second phase of the project is expected to deliver gas in 2020. BP owns 60 per cent of the block with the remaining 40 per cent held by Oman Oil Company. More than 325 wells are planned over 15 years.
The reservoir is known to have tight gas, which is trapped in impermeable rocks and requires techniques including hydraulic fracturing to extract.
Oman, an exporter of LNG to Spain, Japan and South Korea, is studying options to import LNG to help generate power. Domestic consumption jumped to 22bn cu/m in 2013 from 14.7bn cu/m in 2009, according to the US Energy Information Administration. Oman imports gas via a pipeline from Qatar and is in talks to build a link with Iran across the Gulf.
BP CEO Bob Dudley said, “Khazzan is a major resource with the potential to produce gas for Oman for decades.”
