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Daleel Petroleum Cuts Energy Costs

Source: Oman Observer 11/10/2012, Location: Middle East

Gas flaring is a crucial topic of discussion for countries in the Middle East, however companies such as Daleel Petroleum Company in Oman have invested significantly to reduce the overall costs of flaring and notably benefit from this almost wasted resource. Gong Changli, CEO of Daleel Petroleum, recently participated in an interview with The Energy Exchange discussing the issue of gas flaring in the region.

Approximately 150 billion cubic metres (bcm) of gas is flared or wasted every year out of which, the Middle East and North Africa account for 50 bcm reports the Global Gas Flaring Reduction Partnership (GGFR). According to Changli, the strategic reasons why companies reduce flaring is to protect the environment, enhance a company's reputation among the local and business communities of the country, and to gain profits, as proper gas management in the oil and gas sector can increase profits significantly.

Daleel Petroleum Company successfully managed to reduce gas flaring by investing in two projects: the gas plant to produce Liquefied Petroleum Gas (LPG) and Natural Liquid Gas (NLG). Changli, said, "With an initial investment of about $22 million and an annual Opex of about $8.5 million, the company recovers about $15-20 million per year worth of hydrocarbon liquids (NGL and LPG), and saves about $15 million of diesel fuel, which is expected to double in the coming two years."

Other companies in the GCC have also shown a significant decrease in gas flaring. Abu Dhabi Marine Operating Company (ADMA OPCO) has unveiled that gas flaring at Zakum oilfields has been reduced to zero, and Kuwait Oil Company is currently flaring about 1.5 per cent of its gas production.

Furthermore countries across the GCC have also realised the significant costs that will arise and have recognised the need to reduce gas flaring. The UAE has succeeded in reducing flaring by 98 per cent since 1990, and Kuwait is aiming to reach zero flaring in four years time. Changli will participate at the 2012 Gas Arabia Summit, organised by The Energy Exchange and to be held in Muscat from December 2–5, 2012. The summit will have a day dedicated to gas flaring.

Speakers will share presentations on the strategies and technologies to reduce flaring. In addition, leading experts will participate in roundtable discussions to explore: market alternatives to avoid flaring when well cleaning; the potential for EOR gas rejuvenation; the incentives needed to turn waste into revenue; how much fuel could be produced by non-flared gas; and more.

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