FU­ELLING OMAN

Oil and Gas - - CONTENT -

Gas Di­rec­tor Salim Al Sikaiti shares the crit­i­cal im­por­tance of gas to the na­tion and the cen­tral role PDO plays in its de­vel­op­ment

WHAT ARE YOUR THOUGHTS ON PDO’S 40TH AN­NIVER­SARY OF GAS PRO­DUC­TION?

I feel an im­mense source of pride that we have been able to over­come many chal­lenges to con­tin­u­ally de­liver gas sup­plies for our cus­tomers at home and abroad. From an ac­ci­den­tal dis­cov­ery in 1962 when we were drilling for oil in Yibal to the open­ing of the Yibal

Gas Plant in 1978 and be­yond, we have built a first-rate gas or­gan­i­sa­tion which serves the na­tion re­li­ably and ef­fi­ciently. I thank and com­mend all those staff and con­trac­tors, both past and present, who have done so much to help us reach this im­pres­sive mile­stone.

WHAT ARE YOUR VIEWS ON THE ROLE PDO PLAYS IN OMAN’S GAS IN­DUS­TRY?

PDO has been at the cen­tre of the evo­lu­tion of gas in the Sul­tanate and we are the coun­try’s main sup­plier, ini­tially sup­ply­ing all the coun­try’s gas re­quire­ments and cur­rently pro­vid­ing 70% of the na­tion’s de­mand af­ter BP’s Khaz­zan project came on stream. As well as meet­ing the needs of res­i­den­tial cus­tomers, help­ing to pro­vide for ex­am­ple, elec­tric­ity, clean water and cook­ing fuel, gas has fu­elled the de­vel­op­ment of Oman’s in­dus­try, such as steel, alu­minium and fer­tiliser man­u­fac­ture and has gen­er­ated rev­enue through the ex­port of liq­ue­fied nat­u­ral gas. All this ex­pan­sion has been fu­elled by gas and with­out PDO this would not have ma­te­ri­alised.

WHAT IS THE FU­TURE FOR GAS?

Gas will re­main a key en­ergy source, not just for Oman but the whole world, for a very long time. The growth in de­mand will con­tinue and the fo­cus to dis­cover more and op­ti­mise pro­duc­tion will re­main. Right now, we are try­ing to max­imise the us­age of the mol­e­cules of gas. At present, we burn it to pro­duce elec­tric­ity, use it as a raw ma­te­rial and freeze it for ex­port. How­ever, the Gov­ern­ment is also look­ing at in­te­grated so­lu­tions when it comes to gas de­vel­op­ment – not just up­stream but what we do with it down­stream - so we have full util­i­sa­tion of the value chain. So, for ex­am­ple, you could con­vert it to GTL (Gas to Liq­uid) which can gen­er­ate more value and cre­ate more jobs. Se­condly, when you look at our sup­ply and de­mand line, the de­mand line is in­creas­ing. A lot of this is to do with the growth of the pop­u­la­tion and in­dus­trial ex­pan­sion (such as Duqm). Although gas is the clean­est form of fos­sil fuel en­ergy, burn­ing it to pro­duce power is not max­imis­ing the value of gas and is not sus­tain­able for Oman, so that is why we are look­ing at re­new­ables. There is a lot of fo­cus on pro­duc­ing so­lar and wind en­ergy and it is es­ti­mated 15% of our power re­quire­ments will be­com­ing from re­new­ables by 2030, with some say­ing that fig­ure could go as high as 30%. That will en­able us to re-di­rect gas to more value-adding in­dus­trial us­age. The de­mand for gas will in­crease and it’s a very ex­cit­ing time as we seek new ways of en­sur­ing we main­tain the sup­ply. With the re­cent dis­cov­er­ies we have seen, such as Mabrouk North East, the pic­ture looks very promis­ing, but we also need to op­ti­mise our use while seek­ing al­ter­na­tive en­ergy sources.

Gas will re­main a key en­ergy source, not just for Oman but the whole world, for a very long time. The growth in de­mand will con­tinue and the fo­cus to dis­cover more and op­ti­mise pro­duc­tion will re­main. Right now, we are try­ing to max­imise the us­age of the mol­e­cules of gas. At present, we burn it to pro­duce elec­tric­ity, use it as a raw ma­te­rial and freeze it for ex­port. How­ever, the Gov­ern­ment is also look­ing at in­te­grated so­lu­tions when it comes to gas de­vel­op­ment – not just up­stream but what we do with it down­stream - so we have full util­i­sa­tion of the value chain

WHAT ABOUT GAS CON­SER­VA­TION?

Our Gas Con­ser­va­tion Strat­egy fo­cuses on ini­tia­tives to re­duce gas de­mand, cut flar­ing as well as re­search al­ter­na­tives for gas and en­ergy sup­ply. A num­ber of ini­tia­tives have been im­ple­mented, in­clud­ing the use of en­ergy ef­fi­cient power gen­er­a­tion tur­bines and waste heat re­cov­ery sys­tems for ther­mal op­er­a­tions. In ad­di­tion, we have cut losses in our power dis­tri­bu­tion, achieved im­prove­ments in ar­ti­fi­cial lift adop­tion, in­tro­duced gas break­through con­trollers and re­duced water treat­ment and sepa­ra­tion en­ergy re­quire­ments.

Let’s also not for­get our flag­ship Mi­raah so­lar project, be­ing de­vel­oped with part­ners GlassPoint So­lar, which will save a huge amount of nat­u­ral gas a year, enough to pro­vide res­i­den­tial elec­tric­ity to thou­sands of Oma­nis. On the flare re­duc­tion side, a lot of ef­forts have been put in, re­sult­ing in a re­duc­tion of about 40% in Gas Di­rec­torate flar­ing be­tween 2014 and 2018. We also have plans in place to re­duce con­tin­u­ous flar­ing in our fa­cil­i­ties way be­fore the World Bank dead­line of 2030.

HOW IM­POR­TANT ARE PDO’S GAS DE­PLE­TION COM­PRES­SION PROJECTS?

They are key to our sus­tain­abil­ity. We have sev­eral ini­tia­tives to sus­tain gas flows from reser­voirs that have been in pro­duc­tion for a num­ber of years and have suf­fered a drop in reser­voir pres­sure. Our fa­cil­i­ties have grown like mon­sters! For ex­am­ple, the Gov­ern­ment Gas Plant at Yibal has grown 10 times since1978 through­out the three phases of de­ple­tion com­pres­sion. There has also been a huge ex­pan­sion of the Cen­tral Pro­cess­ing Plant at Saih Rawl dur­ing the sec­ond phase, where we are con­struct­ing four par­al­lel com­pres­sion sys­tems, in­stalling 76MW of gas ca­pac­ity and a pair of in­let sep­a­ra­tors, and mod­i­fy­ing the con­den­sate han­dling sys­tem, all with a view to pro­duc­ing 30 mil­lion cu­bic me­tres of gas per day. The Saih Ni­hayda Gas Plant has seen a sim­i­lar ex­pan­sion that will make it a fully in­de­pen­dent sta­tion thus pro­vid­ing more flex­i­bil­ity and re­li­a­bil­ity to our gas net­work.

WHAT CAN WE LOOK FOR­WARD TO ON THE PROJECT FRONT?

The Rabab Har­weel in­te­grated project will pro­duce 80% gas and 20% oil. The first gas is due next year and we will be look­ing to pro­duce 15 mil­lion cu­bic me­tres per day. Some will be re-in­jected to max­imise con­den­sate re­cov­ery, some will be used to pro­duce more oil and some will be sweet­ened (hy­dro­gen sul­phide and car­bon diox­ide re­moved) for ex­port.

We are ex­pect­ing the first gas from Yibal Khuff in 2021, some six mil­lion cu­bic me­tres per day (a com­bi­na­tion of as­so­ci­ated and non-as­so­ci­ated gas). About 10-15 years ago, we had a gas deficit in PDO, but once we have Yibal Khuff on stream the oil side will be self-suf­fi­cient from a gas sup­ply point of view (with the ex­cep­tion of gas in­jec­tion in the Har­weel area). The Mabrouk area is also very promis­ing and we have been very ag­gres­sive there in terms of ex­plo­ration and de­vel­op­ment. We are com­menc­ing Phase 3 of the Mabrouk main de­vel­op­ment, tak­ing us from seven mil­lion cu­bic me­tres per day to over 11 mil­lion cu­bic me­tres per day.

ANY FI­NAL THOUGHTS?

The gas busi­ness is very crit­i­cal for Oman and de­mands very high avail­abil­ity. Gas rep­re­sents a whole value chain of car­bon – LNG, meth­ane, bu­tane, propane, for ex­am­ple – and we un­der­es­ti­mate its im­por­tance. There are ships com­ing into the Oman LNG Plant at Sur ev­ery other day. Just over a third of our gas is ex­ported earn­ing much needed rev­enue for the Sul­tanate and if we miss one ship­ment, you would soon see how much dis­rup­tion it would cause, both for the Gov­ern­ment and our ex­port cus­tomers. It’s a very im­por­tant part of what PDO does and I feel priv­i­leged to be work­ing with the team I have who de­liver day in, day out.

They are key to our sus­tain­abil­ity. We have sev­eral ini­tia­tives to sus­tain gas flows from reser­voirs that have been in pro­duc­tion for a num­ber of years and have suf­fered a drop in reser­voir pres­sure. Our fa­cil­i­ties have grown like mon­sters! For ex­am­ple, the Gov­ern­ment Gas Plant at Yibal has grown 10 times since1978 through­out the three phases of de­ple­tion com­pres­sion.

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