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Together, the fields are thought to contain more than 20 trillion cubic feet representing more than half of the Sultanate's total proven gas reserves.
Gas as much as oil is now the locomotive of the country's economic development and foreign investors' interest in the sector is steadily increasing. There seems no lack of financing available as well for Oman's gas development.
Gulf International Bank has arranged a $234.5 million loan for Oman Gas Company which operates 2,000 kilometres of transmission pipelines in the sultanate between Saih-Rawl and Salalah in the south and between Fahud, Sohar, Al Dakhiliah and the Batinah area in the north.
Upping production
Oman increased its gas production 7.5% in 2005 and has accelerated production even further in 2006 but still needs ever increasing volumes to meet the very large predicted increases in demand resulting from planned industrial development.
According to officials, gas demand has increased 50 per cent since 2000 with power plants consuming about 80 per cent and industrial plants 11 per cent. The rise of new manufacturing ventures including petrochemicals an aluminium smelter will see even more gas required. As a consequence, the sultanate requires to virtually double its output of natural gas again by 2010.
Apart from domestic requirements Oman is expanding its production of liquefied natural gas for export. Oman LNG which owned by the government, Shell, Total and Japanese and Korean interests is due to bring a third processing train on stream which will double the sultanate's LNG production to 6.6 million tonnes-a-year for long-term supply to Spanish and Japanese utility companies.
Gas is also required for enhanced oil recovery programmes such as Occidental's programme to raise production fifteen-fold from its Mukhaizna field to 150,000 b/d using gas powered steam-flood technology.
The growing range of gas needs is driving Oman to step up exploration and drilling under way in several areas. Prospects include BG's offshore discovery in the Abu Butabul field which is thought to have up to 8 trillion cubic feet of reserves.
Next step
A developer for Khazzan is expected to be selected by the end of 2006. The bidders include France's Total, Royal Dutch Shell Group, Abu Dhabi-based Mubadala Development, BP and BG Group, Marathon, ExxonMobil, Chevron, ConocoPhillips, Occidental, Australia's BHP Billiton, Japan's Itochu Corporation, PetroCanada, Nexen Petroleum, Italy's ENI, Kuwait petroleum and Dubai Energy.
Extracting the gas at Khazzan will be a considerable technical challenge though as it lies some 4,500 metres below the surface. However, Petroleum Development Oman, the country's main oil and gas producer, believes the prospect has the potential to be one of the biggest gas fields in the sultanate with up to 10 trillion cubic feet of reserves.
