Launch of Oman’s Major Gas Project with Complex Technology

British Petroleum (BP) has inaugurated the first phase of the massive "Khazan" gas field in Oman. This marks the first time unconventional gas production is taking place in the Middle East. The complex technology for extracting gas from tight gas reservoirs is primarily monopolized by a few oil giants, especially American companies. BP, the operator of the Khazan project, stated in a report on its official website that the necessary complementary technology for developing this field has been transferred from the United States. The significance of the Khazan field's development for Iran lies in the fact that the Islamic Republic signed a contract several years ago to export 10 billion cubic meters of gas annually to Oman, which is exactly the amount produced in the first phase of the Khazan field. In recent years, Oman has had a severe need for gas imports due to increased domestic consumption. Part of the capacity of Oman’s liquefied natural gas (LNG) plants has also remained practically empty in recent years due to gas shortages. Oman, with an annual LNG production capacity of 12 million tons (equivalent to over 16.5 billion cubic meters), is a significant player in the gas market, but according to official Omani statistics, the country produced and exported only 8.5 million tons of LNG last year. Iran intended not only to export gas to Oman but also to liquefy part of its gas at Oman’s LNG plants for export. For exporting gas in its natural state, pipelines are needed. The second method involves compressing gas at minus 160 degrees Celsius, reducing its volume by 600 times, and converting it into LNG, which can easily be exported to international markets via LNG carriers like oil. Iran also had an LNG project with an annual capacity of 10.5 million tons, investing $2.5 billion in it, but the German company Linde exited the project due to sanctions and it has remained abandoned for over 10 years. Over the past two years, Iran has negotiated with many companies, including Siemens of Germany and Total of France, to complete this project, but no results have been achieved so far. BP reports on its website that production from the first phase, with a daily capacity of 28 million cubic meters, began on Monday, October 3. BP and the Omani government’s oil exploration and production company are now focusing on the second phase of this project, which is expected to increase total production capacity to 42 million cubic meters per day (equivalent to over 15 billion cubic meters per year) within three years. Mohammed bin Hamad Al Rumhi, Oman’s Minister of Oil and Gas, expressed his satisfaction with the timely execution of the Khazan project during the inauguration ceremony, stating that the project was launched exactly as planned in September. The report adds that the Khazan field is BP’s sixth major project worldwide. The Khazan field is one of the complex unconventional fields, with gas resources located 5 kilometers underground, requiring the drilling of 200 special horizontal and vertical wells to extract reserves from the sands, with another 100 wells to be drilled in the second phase. The report states that gas will be produced from this reservoir for several decades, with recoverable reserves close to 300 billion cubic meters.