Does Oman have too much gas or too little?

• DOI: http://doi.org/10.1111/oet.12569
• Date: 01 May 2018
• Published date: 01 May 2018

GAS AND POWER

Does Oman have too much gas or too little?

The start-up of BP’s giant Khazzan gasfield in September

2017 is set to boost Oman’s production by 1 bn cfd this year,

to be followed by a second phase providing 500 mn cfd in

2020: all of which looks like providing a substantial boost to

both the production and exports of the sultanate. Thanks to

Khazzan, Oman’s gas production this year should be some-

where in the region of 4.5 bn cfd: a rise of 750 mn cfd, or

20%, over 2017s total.

In addition to this, the national oil and gas company

Petroleum Development Oman (PDO) announced in March

this year that drilling at a nearby field in the west of the

country, Mabrouk, had established the presence of a large

gasfield in the north-east of the field, estimated to contain

over 4 tcf of recoverable reserves. All this is in contrast to

the situation less than 2 years ago when a gas shortage was

being predicted within a few years. Plans were drawn-up for

new power stations to run on coal instead of gas and for fur-

ther substitution of gas by renewable sources, such as solar

power. Future exports of liquefied natural gas (LNG) were

also said to be under threat, Omen exports about 1.1 bn cfd

as LNG, and an undersea pipeline from Iran was mooted to

enable the sultanate to import nearly 1 bn cfd of gas

from Iran.

1|PLENTY OF GAS?

Khazzan and Mabrouk will result in a net gain in Omani gas

production despite the decline of the country’s older gas-

fields. Indeed, there may even be too much gas available

thanks to a decision to reduce the role of gas in power gener-

ation. In April this year, the state-owned Oman Power and

Water Procurement Company (OPWP) announced the go-

ahead for a 1.2 GW coal-fired power station to supply a pro-

posed industrial and refining development at Duqm. More

solar power is also on the cards, all of which should slow

down the growth in gas consumption.

There have been proposals to use some of the additional

gas from Khazzan and Mabrouk to increase exports of LNG;

but this cannot be done unless a new export terminal is built,

since the existing trains are more or less fully used. At pre-

sent, there appear to be no plans for an additional train,

which may delay the development of further new gasfields

after the second phase of the Khazzan field.

If domestic demand for gas begins to grow faster than

forecast, the delay in bringing new gas discoveries on-line

could lead to shortages a few years hence. There is also the

possibility that the 180 mn cfd of imports that come by pipe-

line from Qatar could be lower in future years; and the pro-

posed 1 bn cfd pipeline from Iran may yet fall victim to

future US sanctions on the Islamic Republic, making the

supply situation for Oman much less comfortable than it

appears to be at the present.

How to cite this article: Does Oman have too much

gas or too little? Oil and Energy Trends. 2018;43:8.

https://doi.org/10.1111/oet.12569

DOI: 10.1111/oet.12569

8© 2018 John Wiley & Sons Ltd wileyonlinelibrary.com/journal/oet Oil and Energy Trends. 2018;43:8–9.