Oman has signed gas deals with Shell and TotalEnergies on Block 10, with plans for a new LNG plant in the offing.
Shell Integrated Gas Oman will act as the operator of Block 10, with a 53.45% stake. State-owned OQ will have 13.36% and Marsa LNG 33.19%. Total said it would have an 80% stake in Marsa LNG, while OQ would have the remaining 20%.
Shell said the block would begin producing within the next two years. Production should reach 0.5 billion cubic feet per day, it said. Total said it expected its production from the area to be 24,000 barrels of oil equivalent per day in 2023.
“These agreements represent a major step for Shell and for our relationship with Oman. They generate value and strengthen our Integrated Gas business, which we need to deliver the energy Oman and the world need today,” said Wael Sawan, Shell Integrated Gas, Renewables and Energy Solutions Director.
Marsa LNG plans to develop a low-carbon LNG plant in Sohar, Total said. The plan involves solar panels providing power, producing LNG for use as a bunker fuel.
Marsa LNG will sell gas from Block 10 to the Omani government. This gas sales agreement will run for 18 years – or until the Marsa LNG plant starts up.
Shell noted plans for a separate downstream gas project, under a deal with the government. It said it would also support a plan to produce hydrogen in Oman. “We are looking at how Shell can help Oman with developing low-carbon energy in the future,” said Sawan.
The companies signed an earlier deal with Oman on Block 10 in February 2019. At this time, Shell had been talking about a potential gas-to-liquids (GTL) plant in Oman. The participants abandoned this aspect of the plan in late 2020.
Block 10 is in Saih Rawl, in the Al Wusta Governate, around 400 km from Muscat. The block covers around 1,200 square km.
Petroleum Development Oman (PDO) will build infrastructure in the first phase. This will include a pipeline to the Saih Rawl processing facility.
Omani Minister of Energy and Minerals Mohammed Al Rumhi said the agreement would “further maximise the potential of Oman’s energy industry, in line with the Sultanate’s strategy to create growth opportunities across all energy streams and in line with Oman’s Vision 2040 priorities”.
“We are pleased to sign these agreements with the Sultanate of Oman and further develop our activities in the country while contributing to develop its energy sector in a more sustainable manner,” said Total senior vice president Middle East and North Africa Laurent Vivier.