Total, Shell Ink Oman Gas MoUs
Total and Shell has signed memorandums of understanding (MoU) with the government of Oman to develop natural gas resources in the country May 13.
Both cover the upstream and downstream businesses.
“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%, as per the agreement between both companies and before possible state back-in,” Total said. The objective is to initially produce around 500mn ft3/d of gas with a potential to reach 1bn ft3/d at a later stage. Shell did not issue any statement.
LNG bunkering also included
The French company will use its equity gas entitlement as feedstock to develop in Oman a regional hub for LNG bunkering service to supply LNG as a fuel to marine vessels. This will be achieved thanks to a new small-scale 1mn mt/yr modular liquefaction plant to be built in Sohar port, 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,” stated Arnaud Breuillac, president exploration & production, Total. “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.”
Total produces oil in Block 6 (4%) and in Block 53 (2%), as well as LNG through its participation in the Oman LNG (5.54%)/Qalhat LNG (2.04%) liquefaction complex with an overall capacity of 10.5mn mt/yr.
So too is GTL on the Shell side
Shell said its MoU with Oman covers upstream, LNG, renewable energies, and also gas-to-liquids (GTL). On the latter, it said that it will "operate a GTL project with OOC [Oman Oil Company] as a partner".
"We are hopeful we can use Shell’s integrated gas and new energies investment to accelerate Oman’s diversification and industrialisation agenda," said Shell integrated gas chief Maarten Wetselaar.
Despite the positive words, there have been no recent investments in new GTL, which is widely seen as too expensive relative to new LNG ventures. Shell has operated the giant 140,000 b/d Pearl GTL plant in Qatar since 2011, opened a small 15,000 b/d GTL unit in Bintulu Malaysia in 1993, and is among a number of firms to have agreed to conduct a feasibility study into a possible GTL plant in Mozambique (Sasol being another rival proponent).
The banner photo shows Total's Arnaud Breuillac (left) and Shell integrated gas chief Maarten Wetselaar (centre) signing the agreements and is courtesy of Oman's oil ministry