Overview of current projects under

development in Oman & their link

with economic growth and the
In- Country Value
Maktoom Al-Matani
GM-Engineering & Technical Services
Oman Gas Company
Gas Arabia Summit -2012

His Majesty Sultan Qaboos Speech

Quotes from His Majesty Sultan Qaboos Speech to Omani
Citizens on the Opening of The Council of Oman
(Majlis Oman) on 11th of November 2012
Dear Citizens ..
The private sector is one of the basic pillars of development, both in the economic
concept, which represents commerce, industry, agriculture, tourism, finance and the
economy in general, as well as the social concept, which denotes human resources
development, training, the upgrading of scientific and practical skills, the offering of
new employment opportunities and incentives to take up jobs in the private sector

Current Government Gas Infrastructure

Government Gas System
PDO pipeline
South Oman Gas Line
Power Plants

SOHAR PORT

PDO demand
Other consumers

DOLPHIN
16"

PTTEP

32

MUSCAT

OXY
32"

36"
20"
O/QLNG

FAHUD
OMIFCO
AL KAMIL

GGP

48"
Khauthar
Gas Plant

28"

SAIH RAWL CENTRAL

PROCESSING PLANT

SAIH NIHAYDA
GAS PLANT

24 TO SALALAH

SALALAH
SALALAH POWER PLANT
SALALAH METHANOL
MIRBAT POWER PLANT

Maktoom Rashid Al-Matani

OXY MUKHAIZNA

SUR

Oman Natural Gas Overview

Oman Natural Gas Demand expected to exceed 100 MMstm3/d by 2021 excluding
Dqum.

Expected to remain a key fuel in power generation and industrial sector.

Government upfront strategic planning has ensured sustainable gas supply for years
to come.

Government Strategy to open-up new gas blocks to new national and international
Operators has enhanced Oman gas reserves.

With BP full development and other small fields on-stream Complex natural gas based
industry will be the Focus in the incoming years.

Investments on unconventional Gas is becoming a Must to meet the gas Demand.

Some Key Challenges in future such as gas quality will need to be managed and will
have impact on the operating cost of the gas processing facilities.

Existing Utilization of Gas

POWER PLANTS

Natural
Gas

OGC is only A Shipper

from
Pipeline

INDUSTRIAL &
COMMERCIAL

LNG

CONDENSATE

A Case for a change : Better Gas

Utilization and more emphasis on In
Country Value Projects

In Country Value is A Key Driver for \

diversification of Gas Sector
Promotion of In-Country Value in gas sector which is of
significant importance to the national economy of the
country and that it is a government priority.
Encourages development of In country downstream
industry

Further develop Oman private sector to build and

operate downstream industries
Building local human resources capabilities, job
creation, products and manufacturing
Large impact on human capital hence more ICVs
generated per volume of gas

Key Economical Drivers for Growth and

Expansion

NGL Values Growing With Crude

Oil
Comparative Fuel Values $US per MMBTU

30
25

LNG

Crude

LPG

Naphtha

20
15
10
5
0
1990

1993

1996

1999

2002

2005

2008

2011
9

LPG Demand is ~275 MMTA

and Growing
LPG Demand, Million Tonnes
300

Middle East is largest exporter

~27 MMTA. primarily to Asia.

250
Other
Middle East

200

Latin America

150

Europe

100

Middle East exports anticipated to

grow
despite
increases in
LPG Major
Trade
Flows
- 2011
LPG MAJOR TRADE FLOWS
domestic demand.

Asia

W Europe
N America

50

NE Asia

North America

Africa

0
2000

CIS

ME

Indian
Subcontinent
SE Asia

2003

2006

2009

2012

S America

Asia is largest consumer (92 MMTA).

North America second (60 MMTA)
Middle East Petrochemical demand for
LPG growing rapidly.

3,000 KTPY

Naphtha Demand is ~6 MMB/D

and Growing
Naphtha Demand, Thousand Barrels/Day
7000
Middle East

6000

Asia is largest importer ~1.4 MMB/D.

Latin America
Other

Middle East is largest exporter ~740 MB/D.

5000
Europe

LPG Major
Trade Flows - 2011
LPG MAJOR TRADE FLOWS

4000

3000

2000

W Europe

Asia

CIS

N America

NE Asia

1000

Africa

ME

Indian
Subcontinent
SE Asia

0
2000

North America

S America

2003

2006

2009

2012

Petrochemical naphtha used primarily in

Asia and Europe owing to lack of gas
and NGL feedstock.
Asia is largest consumer (3.9 MMB/D).

3,000 KTPY

Natural Gas Feedstock Consumers

Breakeven
Gas price
$/MMBTU

LNG

5-6

GTL

3-4

Methanol

3-4

Fertilizer

1-2

Aluminum

1-2

Polyolefins

18-20
(ethane)

Feedstock represents a very large outlet

for gas.
Product prices and high capital costs
limit the maximum breakeven feedstock
price.

Production of Polyolefins represents high

value added.

Global Chemicals and Plastics

Trade
Million Tonnes per Year

China largest importer

China production will increase,
but imports still growing.
Middle East is largest exporter
owing to low-cost feedstocks

Trade growing at 5-6% per year

Major Added value by using city

gas for cooking in Muscat
OGC has concluded the Concept phase and awaiting for FEED study
commencement
LPG substitution provides two financially relevant benefits
The spread between Natural Gas and LPG prices is
forecasted to further grow. Hence, the macroeconomical benefit of introducing a NG network is the
amount NG consumed

With the introduction of an NG network the

specifications for the LPG plants can become les
strict. This will further increase the amount of
released LPG by approximately 20%.

Salalah LPG Extraction

Project
OGC is concluding the Concept phase
The plant is planned to be on-stream 2018

RESIDUE GAS
ABU
TUBUL
PDO

OOCEP

SAIH RAWL
CPP
PDO

KHAZAN/
MAKARM
BP

OCCIDENTAL

MIRBATt

24/32
SGL
NIMR
COMPRESSOR
STATIOIN

RABAB/
HAREEL

Part of Omans plan to extend the

natural gas value chain

Salalah
Extraction
Project

PROPANE
BUTANE
NAPHTHA

Further Value Enhancement

NGL Extraction and Potential Steam Cracker
NGL
Extraction

Integrate petrochemical plant into Sohar Refinery Complex.

Synergies enhance economics.

Further Integration of Government Gas System

NGL
Extraction

Government Gas System

PDO pipeline
South Oman Gas Line
Power Plants

SOHAR PORT

PDO demand
Other consumers

DOLPHIN

City Gas

16"

PTTEP

32

Future demand
Future supply

MUSCAT

OXY

NGL
Extraction

32"

36"
20"

Future Power Plants

O/QLNG

SUR

Block 62

FAHUD

OMIFCO
AL KAMIL

GGP

48"
BP
Yibal
khuf

Khauthar
Gas Plant

28"

SAIH RAWL CENTRAL

PROCESSING PLANT

LPG
Extraction

SAIH NIHAYDA
GAS PLANT

OOCEP
BLOCK 60
24 TO SALALAH

LPG
Extraction

SALALAH
Rabab

Ad Duqm area
OXY MUKHAIZNA

Petrochemical industry

New interlink pipeline benefits

New interlink pipeline between North and South will have the following
benefits

Mitigate impurities in the gas such as Nitrogen and to meet customers requirement.
Can serve as a loop line to the existing interlink and maximize gas supply to North
grid in case of any trip major suppliers.
Connect BP and other suppliers into an integrated gas network system.
Provide operational flexibility and manage export gas quality such as Heating
values & capability to direct the gas based on demand requirements
It will be possible to control the overall gas integrated network from a central
control center.

Possibility of considering NGL Extraction Facilities in Fahud area which can be

sent to Sohar for upcoming industries.

OGC Leading midstream and downstream expansions

and ICV Initiatives

All the ongoing OGC development projects and initiatives focus on

maximizing benefits from the Gas Chain and on In Country Values Gains
OGC is working with MOG and other stakeholders in identifying areas as
growth nodes for spatial development initiatives
OGC and ORPIC started integrating upstream and Downstream Role
players aspirations to have further value addition of the gas.
With all these projects under development OGC puts itself in critical step
of midstream and downstream industries expansion in Oman and the region.

Maktoom Rashid Al-Matani