BP, Oman in $16b Gas Project

BP, Oman in $16b Gas ProjectBP, Oman in $16b Gas Project

BP and state-owned Oman Oil Company agreed to expand an exploration and production sharing agreement of the Khazzan natural gas field to include a second development phase, at an estimated cost of $16 billion for the entire project. Block 61 will add 1,000 square kilometers to the original 2,700 square-kilometer-area of development, BP said on Sunday in a statement, Bloomberg reported. The project will produce around 42 million cubic meters per day, or 40% of Oman’s current output. The new development requires final approval of Oman’s government and BP, which is expected in 2017, the company said. The reservoir is known to have “tight gas”, which is trapped in impermeable rocks and requires techniques, including hydraulic fracturing to extract. Oman, an exporter of liquefied natural gas to Spain, Japan and South Korea, is studying options to import LNG to help generate power. The small Arab nation imports gas via a pipeline from Qatar and is in talks to build a link with Iran across the Persian Gulf.