Two oil majors have struck a deal with Oman over the development of natural gas resources in the Middle Eastern state.
Total and Shell, as operator, will develop several natural gas discoveries located in the Greater Barik area on onshore Block 6 with respective shares of 25% and 75%.
They aim to produce of around 500million cubic feet of gas per day, rising to 1billion at a later stage.
Total will use its share to develop a regional hub for supplying LNG as a fuel to marine vessels.
Arnaud Breuillac, president, exploration and production at Total, said: “We are pleased to sign this MoU with the Sultanate of Oman that will give us access to new gas resources and the opportunity to develop an integrated gas project.
“We will bring our expertise in LNG and will introduce access to a new gas market for the Sultanate. Developing an LNG bunkering service will generate in-country value and job opportunities, and will support industry diversification through fostering the shipping activity in Oman.”
Liam Yates, research analyst, Middle East & North Africa upstream, at global natural resources consultancy Wood Mackenzie, said: “This new development will help to offset longer-term decline from Petroleum Development Oman’s existing production in the area. Oman’s state-owned oil company is also expected to participate in the venture.
“Shell and Total will commercialise the gas from Greater Barik separately, with Shell and partner Oman Oil Company constructing a gas-to-liquids plant in the port of Duqm on Oman’s east coast.”
Mr Yates added: “Total will construct a small-scale liquefaction terminal at the port of Sohar, with the intention of establishing a regional LNG bunkering business. This follows the French major’s announcement in December that it would supply the shipping company CMA CGM with 0.3 mmtpa of LNG over 10 years.
“The new agreement demonstrates Shell and Total’s long-term commitment to Oman through establishing an integrated gas business in the country and will help to support the government’s in-country value and job creation targets.”