21 Dec 2021 | 13:03 UTC

Shell, other partners to develop gas from Oman's Saih Rawl field with startup in 2 years

Highlights

Shell to be operator of Block 10 in Saih Rawl with 53.45% stake

Block 10 expected to evenutally produce 500 MMcf/d of gas

Shell may also develop low carbon projects, including hydrogen in Oman

Shell, Oman's state-owned energy company OQ and Masra Liquefied Natural Gas plan to develop block 10 in Saih Rawl gas field in the Gulf state, with startup expected in two years to eventually produce 500 MMcf/d of the commodity.

Shell Integrated Gas Oman BV, a unit of the parent company, OQ and Masra, a joint venture between OQ and TotalEnergies, signed a concession agreement with Oman's ministry of energy and minerals for the development of the block as well as a sales gas agreement for production, Shell said in a statement Dec. 21.

Under the concession agreement, Shell will be operator of block 10 with a 53.45% stake, with OQ and Masra holding 13.36% and 33.19%, respectively.

In the initial phase, Petroleum Development Oman will build the infrastructure for the project, including the main pipeline to the Saih Rawl gas processing facility.

Besides the development of of Block 10, Shell and Oman "will develop options for a separate downstream gas project in which Shell could produce and sell low-carbon products and support the development of hydrogen in Oman," Shell said.

Any potential project would be subject to further agreements and future investment decisions, it said.

Gas production

Shell is one of the biggest international oil companies operating in Oman, the Middle East's biggest oil producer outside OPEC.

It has a has a 30% share in Oman LNG and a 34% stake in Petroleum Development Oman, alongside the government's 60% holding. Other partners in PDO are TotalEnergies (4%) and Partex (2%).

Oman's production and imports of natural gas rose 10.5% in the first 10 months of 2021 from a year earlier, led by an uptick in associated gas, according to government data.

Production and imports of gas reached 42.17 Bcm, up from 38.15 Bcm over the period, according to figures published by the National Center for Statistics and Information.

Associated gas production climbed 28% to 7.74 Bcm during the January-October period, while non-associated output and imported gas increased 7.2% to 34.4 Bcm.