BP/OOCEP – Block 61 Gas Field Development – Oman - Project Profile

BP/OOCEP – Block 61 Gas Field Development – Oman - Project Profile

Synopsis

"BP/OOCEP – Block 61 Gas Field Development – Oman- Project Profile" contains information on the scope of the project including project overview and location. The profile also details project ownership and funding, gives a full project description, as well as information on contracts, tendering and key project contacts.

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Summary

BP Exploration Ltd (BP) and Oman Oil Company for Exploration and Production (OOCEP) are undertaking the construction of Block 61 Gas Field project in Oman.

The project involves the development of the Gas Field with 10.5 trillion cubic feet (tcf) of gas accessible or recoverable gas resources and 25,000 barrels of gas condensate on a daily basis. It is being implemented in phases.

The first phase is located at Khazzan field is spread over a 25 year concession period and aimed at producing one billion cubic feet (bcf) or 28.3 million cubic meters (m3) of shale gas per day.

The first phase of the project will see the establishment of a huge gas plant with a capacity to process one bcf/day of gas. In addition to the drilling of 300 wells, investments will also be made in the construction of 400km of buried gas gathering system to carry multi-phase gas condensates from the well sites to CPF; a 60km 36-inch export pipeline linking the CPF to the gas network at Saih Nihayda; a 68km 12-inch pipeline carrying the condensates stabilised at the CPF to Yibal to feed the network; and a 600m3 per day raw water treatment plant and other infrastructure.

The second phase in Ghazeer field includes the construction of a gas plant aiming to increase the production capacity of the first phase from one bcf/day to 1.5bcf/day of gas.

In January 2007, BP started the negotiation to sign an exploration and production sharing agreement with the Sultanate of Oman. However, the final and amended agreements were signed in December 2013. The agreement covers an area of 2,800kms in central Oman, which contains a number of 'tight gas' reservoirs.

The Khazzan-Makarem area holds an estimated 20 trillion cubic feet of gas-in-place. BP was awarded the concession to develop the Khazzan-Makarem gas field (also known as Block 61) by Ministry of Oil & Gas of Oman in early 2007.

WorleyParsons Oman has been appointed as FEED contractor for the project. The scope of work includes the engineering definition of options for the extended well testing of tight gas reservoirs contained within the field.

The seismic acquisition for this project was done by the US Global Geophysical Services, and Norway's PGS Data Processing has been awarded the contract to process the new seismic data and reprocess existing seismic data.

Dalma Energy & Co LLC Oman has been appointed as drilling contractor. In September 2012, BP announced its plans to increase its capital expenditure from US$15,000 million to US$24,000 million for the development of the project.

In February 2014, Petrofac Ltd and Consolidated Contractors Company (CCC) were awarded US$1.4 billion engineering, procurement and construction (EPC) contract for building central processing facility (CPF) at the first phase.

On March 4, 2014, BP awarded US$2,000 million contract to Jacobs Engineering Group Inc. to provide engineering, procurement and construction management services for gas gathering and water pipelines, wellhead production and export pipelines for the southern sector of Block 61 at the project. Jacobs will also undertake detailed design and program management for the associated project infrastructure.

In June 2014, Veolia was awarded US$50 million contract to design, build and operate (DBO) a wastewater treatment plant.

On October 1, 2014, BP awarded US$400 million contract to KCA Deutag for the construction and operation of five new rigs. Also, Abraj Energy Service was awarded a contract of US$330 million to supply three drilling rigs.

On October 22, 2014, BP issued tenders to undertake EPC work for the three major pipeline packages involving 400km gas gathering system, a 60km export pipeline with submission deadline as November 6, 2014, and 68km condensates pipeline with submission deadline as November 13, 2014.

Schlumberger has been awarded a five-year contract for the supply of drilling and completion products and services for the project.

In January 2015, Galfar Engineering & Contracting (Oman), Gulf Petrochemical Services & Trading (GPS, Oman), Punj Lloyd (India), The Oman Construction Company (Toco) have submitted the commercial bids for the pipeline.

On May 10, 2015, Galfar Engineering and Contracting awarded a US$110 million contract to build and install a gas gathering system which involves the construction of duplex stainless steel (DSS) pipelines including main headers, subheaders, and flow lines on the project.

On July 15, 2015, Carillion Alawi was awarded a contract to build the operational base and accommodation complex. The contract involves the construction of accommodation facilities, including an operational base, a residential complex for 250 personnel and other infrastructure buildings.

On October 13, 2015, Alemco has been appointed as MEP contractor. The scope of Alemco includes MEP installation and infrastructure to 23 buildings, including accommodations blocks, maintenance, and administration buildings, with a total built-up area of 32,000m2.

In December 2015, 27 wells had been drilled and completed and the central processing facility was 60% completed.

70% of the first phase construction works were completed by June 2016, and 80% by October.

In November 2016, BP and OOCEP made an agreement with Sultanate of Oman amending the Block 61 exploration and production sharing agreement (EPSA) to extend the license area of 1,000km2 for the development of the second phase (Ghazeer field).

In April 2017, five shortlisted companies have submitted bids for the second phase project management contract (PMC). They are namely, Bechtel, Jacobs Engineering, KBR, Amec Foster Wheeler and WorleyParsons.

The drilling of the 50th and last well under the first phase was completed in May 2017.

In September 2017, BP plans to drill 100 wells in the second phase.

On September 25, 2017, production commenced marking the completion of the first phase of Khazzan gas field.

In December 2017, Petrofac Ltd awarded US$800 million (lump sum contract) engineering, procurement, and construction and Commissioning (EPCC) contract for building central processing facility (CPF) at the second phase.

Construction works are underway on the second phase of Khazzan gas field.

On January 17, 2018, Jacobs Engineering Group was awarded as an engineering, procurement and construction management (EPCM) services contract for three years which includes the development of export pipelines, well site facilities, and the expansion of the gas gathering system of the second phase.

Scope

The project involves the development of the Block 61 Gas Field with 10.5 trillion cubic feet (tcf) of gas accessible or recoverable gas resources and 25,000 barrels of gas condensate on a daily basis in Oman.

The US$16,000 million project includes the following:

1. Drilling of 300 new wells

2. Construction of a central processing facility

3. Construction of rigs

4. Construction of 400km of gas gathering system

5. Construction of 60km 36-inch export pipeline

6. Construction of a 68km 12-inch condensates pipeline

7. Construction of a 600m3 per day raw water treatment plant

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