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Duqm Pipeline Construction to be Awarded by End-2013

Source: Oman Observer 12/4/2012, Location: Middle East

A contract for the construction of a major gas pipeline that will supply natural gas from central Oman to a new industrial and maritime hub under development at Duqm, is due to be awarded by the end of 2013. Oman Gas Company (OGC), the state-owned entity that owns and operates the country’s gas transportation grid, is overseeing the implementation of the 240km pipeline, which will serve as a lifeline for industries and utilities envisioned at Duqm. Total investment in the pipeline project is estimated at $250 million, it is learnt.

OGC’s chief executive officer, Yousuf al Ojaili, said the 36-inch pipeline will supply gas from Saih Nihayda in central Oman to Duqm. “We will be awarding the contract for the supply of pipelines for the project in the first quarter of 2013. A number of international companies are bidding for this supply contract. Bids are under evaluation. However, an award for the actual construction of the pipeline is scheduled towards the end of 2013,” Al Ojaili stated.

Speaking to journalists on the sidelines of the Gas Arabia Summit, which was formally opened at the Muscat Intercontinental Hotel yesterday, Al Ojaili pegged the capacity of the pipeline at 25 million standard cubic metres of gas per day. This capacity is large enough to cater to long-term gas demand growth in the Duqm area. “If I compare this capacity with Sohar, then it would be sufficient for at least the next 20 years, if not more,” he said. Gas volumes will initially meet the energy and feedstock needs of a massive refinery planned at Duqm, alongside a petrochemicals complex due to come up at a later stage.

Significantly, the project’s front-end engineering design (FEED) has been done entirely in-house by OGC, Al Ojaili said. The pipeline is due to brought into operation in 2016. Earlier, in an address to delegates at the opening of the four-day Gas Arabia Summit, Nasser bin Khamis al Jashmi, Oil and Gas Ministry Under-Secretary, welcomed ongoing efforts by a number of oil and gas companies to develop the Sultanate’s gas reserves. He noted in particular fledgling efforts to tap Oman’s unconventional gas resources.

“The search for gas is now focusing on the exploration and development of unconventional gas worldwide. Here in Oman, we have progressed well in the development of tight and sour gas and have even drilled what is believed to be the deepest gas wells in the Middle East to over 7 kilometres in search of – and the desire to understand - very deep unconventional gas resources.”

The Under-Secretary noted in particular progress being made by energy major BP in the development of the prolific Khazzan-Makarem gas fields. Several appraisal wells have already been drilled with long-term production tests having been completed too, he said. “We hope that there will be a joint decision soon between the government and BP to go for full development, which is estimated to add about one-third of current gas production to Oman, hence helping the Sultanate to sustain its long-term gas production,” Al Jashmi stated.

Also making good headway in the development of their respective resources are PDO, Occidental, Oman Oil E&P, Petronas and others. “Oman is keen to develop its gas based industry and the Ministry of Oil and Gas will continue to provide additional gas to local industries as gas becomes available,” he added.

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