OMAN - The OLNG Venture.

The $2.5 bn OLNG venture is 51% owned by the government. The state's partners in this are: Shell (30%), Total (5.54%), Korea LNG Co. (5%); Mitsubishi Corp. (2.77%), Mitsui & Co. (2.77%), Partex (2%), and Itochu Corp. (0.92%). OLNG is limited to the downstream element, consisting of two trains - now with a combined capacity of 7.2m t/y. The upstream is fully owned by the government but is operated on its behalf by the main oil concessionaire in the country Petroleum Development Oman (PDO).

On Nov. 16, 1996, Sultan Qaboos of Oman inaugurated construction of the liquefaction plant at Qalhat. The sultan's then Oil Minister Said Bin Ahmad Al Shanfari said at the ceremony: "The LNG venture...should generate $24 billion for the sultanate over the next 25 years". The then Deputy Oil Minister and Chairman of Oman LNG, Salem Bin Mohammed Shaaban, later said the project would generate a total of $29 bn, with about $12.4 bn to come from the upstream element.

On Nov. 14, 1996, OLNG had awarded the EPC contract for the LNG plant to a consortium made up of Chiyoda Corp. of Japan and Foster Wheeler of the US. The value of the contract was $1.2 bn. The Chiyoda/Foster Wheeler partnership subcontracted work to qualified local companies (see background in Vol. 58, No. 7).

The fields producing the natural gas for OLNG are Saih Nihayda, Saih Rawl and Barik in central Oman, where continuing exploration has increased their proven reserves by more than 2.5 TCF since late 2000. Development drilling there began in the first half of 1997. The fields came on stream before end-1999 and these helped raise Oman's gas production to 44 MCM/day.

The third LNG train has required a further development of the fields under a $250m project to raise production to 64 MCM/day before end-2005. Work on this began in late 2001 as PDO, after dividing the project into three separate packages, contracted the companies for the EPC works. The first package will add 20 MCM/day of new gas treatment capacity at the Saih Nihayda plant. The second involves installing well-head compression facilities at Yibal. The third, covering the pipelines, centres on a 48-inch pipe to run from the field to Sur and a gas booster station being built.