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Dolphin Signs Pact for Purchase of Omani Gas

Dolphin Energy Ltd. (DEL) has signed one of three key agreements for the purchase of Omani natural gas which will begin to flow from the fourth quarter of this year.

The gas will be used by the Fujairah state owned Union Water & Electricity Company. DEL is currently constructing a 182 kilometer, 24-inch pipeline which will link Al- Ain with Fujairah, on the UAE East Coast, in the fourth quarter of 2003. Thereafter, OOC will supply the contracted quantities of gas at the Oman-UAE border near Al Ain-from where it will flow, through the Dolphin, line to UWEC's new power and desalination plant in Fujairah.

Dolphin Energy's sales and purchase agreements are for a term of 3.5 to 5 years. Dolphin's own gas supplies from Qatar will start to flow by undersea line to the UAE in 2006 at a rate of two billion cubic feet a day, replacing the Omani gas.

The border pipeline connection will then be used to supply Qatari gas to Oman as and when required. For Dolphin Energy, Al Sayegh commented: "Further to the Memorandum of Understanding that we had earlier signed with each company, we were quickly able to finalise gas sales and purchase agreements with both UWEC and OOC. Dolphin is delighted to have been able to resolve the detailed issues involved in each case and to have signed these landmark agreements".

The new Dolphin pipeline will initially provide up to 135 million cubic feet per day (mcf/d) on average of natural gas to service UWEC's forthcoming 656 MW power generation plant and its associated 100 million gallon a day (mg/d), desalination project. Dolphin's contractors are Dodsal Ltd of India.

Source : Khaleej Times - 7 February, 2003


Holland - Based Consultancy Firm Sets Up JV in Oman
Tebodin wins PDO engineering services contract

MUSCAT - The leading international engineering consultancy group Tebodin has been awarded a four-year contract to provide engineering design services for Petroleum Development Oman (PDO). The Holland-based group has tied up with a local firm to execute the contract, as well as explore opportunities to grow its business and expand its operations in the Sultanate.

Tebodin & Partner LLC, established as a local Omani company, is a joint venture between Tebodin Middle Fast LLC and Middle East Engineering Consultancy LLC, a 100 per cent Omani firm. Senior executives of the group's Dutch headquarters in The Hague and their local partners were in the city at the weekend for the official opening of the company's new local office at Al Athiaiba.

In attendance were Hans. J. Hegger, Managing Director of Tebodin Consultants & Engineers (the Netherlands), Age S de Vries, Managing Director of Tebodin Middle East Ltd (UAB), Salim al Kindy, Deputy Managing Director of Tebodin & Partner, and Nasser A al Rizeiqi, Managing Director of Middle East Engineering Consultancy LLC.

According to Frits Boonen, Managing Director of the group's Oman subsidiary, Tebodin led a field of more than 30 international and local consultants for the prestigious PDO contract. Over the four- year term of the contract, the company will provide design- engineering services for various oil and gas facilities and pipeline infrastructure develop- ment planned by PDO.

As part of the contract, Tebodin will design, among other things, the key 48-inch diameter gas pipeline that will transport gas as feedstock for the government's 3rd LNG Train project under development at Qalhat.

The new pipeline will run some 250km from Saih Nihayda in central Oman to the project site. In addition, Tebodin will handle the engineering design for the second phase of the Yibal Depletion Compression project, aimed at boosting gas recovery from this key reservoir within PDO's concession.

Tebodin, a multidiscipline engineering consultant with expertise in a variety field, is also keenly eyeing opportunities outside PDO's domain. "Oman is investing in new gas infrastructure in Qalhat and the Sohar area for new projects in petrochemicals, energy and various other industries. The government is considerably cranking up the capacity of its gas network to serve these objectives, Boonen said.

Echoing this viewpoint, Hegger added: "We axe here for continuity, not for quick wins. We see great opportunity lot only in PDO, but in government con tracts, industrial Projects in the Sohar area, and in the private sector"

In particular, the firm is targeting key organisations, notably Oman Refinery Company, Oman Oil Company, Shell Oman Marketing, and the Ministry of Regional Municipalities, Environment & Water Resources (MRME-WR) for potential business.

Elsewhere in the Gulf region, Tebodin is undertaking several prestigious consultancy contracts, notably the engineering design for a water transmission project at Shuweibat in Abu Dhabi involving a capital investment of around $800 million. The firm also played a consultancy role in the expansion of the Dubal and Alba aluminum smelters in Dubai and Bahrain respectively.

With offices in Dubai, Abu Dhabi, Bahrain, and lately in Muscat, Tebodin is now looking to expand its presence in the region. "Our, next goal is to enter Qatar where we already have some projects in hand," Hegger noted.

Set up in 1945 at the end of the Second World War, Tebodin today boasts a worldwide presence in some 40 offices located throughout Europe and the Middle East. A strategic alliance with Lockwood Green provides global coverage and the combined expertise of a worldwide force of around 4,500 engineers covering a range of services such as consultancy (oil and gas, financial, environmental, and pharmaceutical), project management, design and engineering, procurement services and construction management.

Source : Oman Daily Observer - 1 February, 2003


Khatami Presses Government on Gas Pipeline Deal

New Delhi - Iranian President Mohammed Khatami yesterday urged leaders to join hands with Tehran to construct a controversial multi-billion-dollar gas pipeline which would bring fuel to energy-starved India. Speaking to industrialists, Khatami said the long-delayed pipeline which would cross India's neighbour Pakistan "can be implementable".

A relatively long time has passed since its preliminary planning," Khatami said, but "the project is still in the phase of its feasibility study". But once research is complete, "this pipeline project will play a very significant role in providing India with inexpensive and perennial flow of energy," said Khatami, ending a four-day visit to India.

Discussions on the $3.5 billion pipeline began in 1994 but a breakthrough has been elusive due to tensions between Pakistan and India and the high cost of the project. In the past week alone, a key gas pipeline in central Pakistan has exploded three times through either sabotage or stray rockets from warring tribesmen.

The proposed pipeline would run 1,600km from Iran to the southern Pakistani province of Sindh before travelling another 1,000km to India,

For Iran, which holds the world's largest gas reserves after Russia, the Indian market is as important as the European market which it hopes to serve one day through its pipeline across Turkey. India, meanwhile, imports more than half of its billion-plus population's energy needs. It is bracing for a jump in oil prices that could be triggered by a US- led attack on Iraq.

"Iran has gas and we want it," Prime Minister Atal Behari Vajpayee said on Saturday after talks with Khatami.

Vaipayee said India and Iran agreed that a "mutually acceptable and stable arrangement for the transportation of gas" needed to be found.

"But there are some impediments in the middle which we are trying to remove. We are working towards a mutually satisfactory agreement which will be long lasting," Vajpayee said.

Oil Minister Rarn Naik will visit Iran some time this year to discuss the export of gas, the Press Trust of India (PTI) said yesterday. The report said Iran's oil Minister Bijan Namdar Zanganeh last week sidestepped the Pakistan issue to offer Indian national oil firms equity in Iranian oil and gas fields in exchange for New Delhi buying 2.5 million tonnes of gas each year.

The report said India favoured an underwater line to avoid any disruption in gas supply in Pakistan, which with India has fought three major wars. "Iran recognised our concern for safe delivery of gas at our borders," Naik told PTI. "The feasibility study for an underwater line from Iran to India is going on schedule. No discussions were held on the onshore pipeline passing through Pakistan."

Khatami yesterday also urged Indian investment, in Iran's gas and oil industries and called for more co-operations in the tourism, information technology and software sectors, saying Iran enjoyed "easy access" to Europe and Central Asia. To boost tourism, Khatami said plans were underway for direct flights from Tehran to India's capital New Delhi and financial hub Mumbai.

A.N.S. Khamoushi, president of the Iranian Chamber of Commerce and Industry, called on the two countries to diversify their commerce. He said that of $2 billion in bilateral trade in 2001-2002, 70 per cent amounted to oil imports by India.

Source : AFP PTI - 28th January, 2003


Pact for Pipeline to Carry Gas to Indian Ocean Ports
Jamali signs $2b deal for trans-Afgan pipeline

ASHKHABAD - The leaders of Afghanistan, Pakistan and Turkmenistan yesterday reached a long-awaited agreement for a pipeline to carry Turkmenistan's natural gas to the Indian Ocean via Afghanistan and Pakistan. Pakistan's Prime Minister Zafarullah Jamaii, Afghan interim leader Hamid Karzai and Turkmen President Saparmurat Niyazov signed the ambitious accord to build a 1,500km $2 billion trans-Afghan gas pipeline.

"We are glad that this important agreement has been signed, as this is a significant step towards the realisation of the project," Niyazov said. The feasibility study for the link, carried out by the Asian Development Bank (ADB), will be completed by July 2003, after which international companies will have the chance to form a consortium to develop the project, he noted.

A Turkish company, Chalyk Holding, has said it is ready to participate in the construction of the pipeline, he said.

The pipeline deal to connect Turkmenistan's Dauletabad fields to seaports in Pakistan across the mountains of Afghanistan brought to an end 20 years of laborious negotiations mired in regional conflict. The projected pipeline capacity is for 30 billion cubic metres of gas per year, to be transited via Kandahar in Afghanistan to the Pakistani city of Multan.

Analysts have said the pipeline will 'open up Turkmenistan's vast natural gas reserves to the wider world for the first time and attract millions of dollars of transit tariffs to Afghanistan's ruined economy. However, industry experts say the pipeline, which could have a capacity of 20 billion cubic metres, will only be feasible if it supplies gas to India as well as Pakistan, but tensions between the two nations are high.

Niyazov said the three leaders hoped the Indian leadership will join in the project. "We will be working on this and making every effort," he said. The three countries are still in talks with the ADB and other multinational lending agencies on whether the pipeline can be extended to India, according to an official in Islamabad quoted on Thursday by the specialist International Oil Daily.

The ADB has agreed to allocate a one million dollar loan for a feasibility study expect- ed to be completed by next August, the daily said. Jamali said the signing of the accord would "draw foreign investors to the project." Karzai for his part said the pipeline project would serve the energy needs of all three countries and "help improve the situation in the region and bring economic growth to our states."

An earlier attempt to build the trans-Afghan gas pipeline was contracted by US energy company Unocal, but its plans were scuppered in 1998 when US cruise missiles struck Al Qaeda training camps in Afghanistan in response to terrorist attacks on US embassies in Nairobi and Darussalam.

However, since the fall of Afghanistan's Taleban regime last year, the pipeline project has been catapulted back onto the agenda by regional leaders hoping it will bring enormous wealth to their impoverished central Asian region. The project is expected to be completed in four years, although many observers are sceptical about its prospects given the political instability in the region. The ADB is acting as strategic partner for the pipeline's construction and will conduct market research for the sale of Turkmen gas abroad. The three leaders will meet again in Kabul in September 2003, Niyazov said. - AFP

Source : Times of Oman - 28th December, 2002


Oil Pact Signed with Iran

A consortium of state-run oil firms has signed an agreement with Iran to explore for oil in the Gulf, a Foreign Ministry spokesman said. He said India has committed to invest $27 million to explore the Farsi area of the Gulf which was expected to yield 500 million barrels of oil.

State-run Oil and Natural Gas Corp.'s (ONGC) overseas arm Videsh holds 40 per cent in the venture, Indian Oil Corp holds another 40 per cent while the rest is with Oil India Limited.

India has been looking to buy into oilfields overseas to ensure a stable supply, as the country imports more than 70 per cent of its oil requirements. The ONGC recently purchased Canadian oil firm Talisman's 25 per cent stake in the Greater Nile Petroleum operating Co. (GNOC), which accounts for the bulk of Sudan's oil production. Officials have denied that the move for diversification was linked to fears over a war in oil-rich Iraq.

India hopes to diversify its oil purchases further by buying from countries including Egypt, Indonesia, Malaysia, Nigeria, Russia and Venezuela. It currently buys most of its
oil from the Middle East.

Source : Times of Oman - 28th December, 2002


PDO to Implement Multi-Billion Projects to Boost Oil Production

Petroleum Development Oman the premier oil company in the Sultanate will invest about $1.5 billion per year for the next five years to enhance the oil production and arrest the decline in the production and increase reserves.

As part of the long-term energy strategy, it will raise the total investment in the gas field to $2 billion, the largest gas investment by PDO since the Saih Rawl gas field.

While 2003 is going to be a challenging year, signs of recovery will be visible in 2004 due the new exciting investment plans for Oman's future, said the company's new Managing Director John Malcolm.

During the last 18 months, PDO has been going through a difficult phase as it failed to achieve productions and reserve targets. A major accident in one of the oil rigs also created additional problems.

Addressing the media to outline the company's future plans, Malcolm said in a presentation on "PDO's Exciting Plans for Future" that PDO has been going through a rough patch over the last 18 months.

However using a four-pronged strategy - production optimization, secondary oil recovery, enhanced oil recovery and exploration programmes - PDO will continue to remain a forward looking oil company by employing the latest technology to recover hydrocarbon, he said.

"PDO produces 90 percent of the country's oil, natural gas and LNG supply. Oil production is the backbone of Oman's economy and it represent 35 percent of the country's GDP", said Salim bin Mohammed bin Shaban al Ojaily, the Undersecretary, Ministry of Oil and Gas. PDO employs nearly 4,500 people - 85 per cent of them are Omanis.

Admitting that the company faced a number of problems especially the declining life cycle of oil fields, the Under-Secretary said that in consultations with the government and the shareholders, PDO has put in place a strategy to use new technology either to find more oil or to arrest decline in the oil life cycle."

At present, the known oil reserves in the country are 50 billion barrels per day, of which only 23 percent is recoverable using, know technologies.

"Recovering 73 per of the oil reserves requires new techniques and PDO is doing everything possible to recover part of this oil. The new strategy has been put in place to overcome production loss and increase oil recovery next year," he added.

The target is to reach 800,000 barrels a day by 2007 against the current PDO production of nearly 770,000 bpd. Even though the multi billion investments will just add 30,000 bpd to the current production level by 2007, it will be long-term investment of developing the oil and gas industry.

It is estimated that the combined oil, condensate and gas production will go up from around 1 million bpd in 2003 to more than1.2 million bpd in 2007.

In the gas field, a third processing facility will be built at Saih Rawl and a completely new 48-inch pipeline is planned to be built alongside the existing 350-km line to Sur. In addition, PDO has been asked to supply gas to the new aluminum and ammonia plants in Sohar and the desalination plant in Salalah.

"The scale of this investment should not be underestimated. This investment will see the newly discovered gas fields of Central Oman brought on stream earlier than we had previously planned. Our development plans for the Barik and Saih Rawl fields have also been brought forward," Malcolm said.

Reacting to reports on the fall in PDO oil production, he said that in co-ordination with the Omani government and foreign shareholders, the company has put in place a multi-billion revival strategy to use the latest and the most appropriate technology.

PDO, which employs 3,470 Omanis is a technologically minded company which is 80 percent Omanised, he said. PDO may not be able to achieve 100 percent Omanisation by 2005 as projected earlier because the company requires external expertise to achieve production targets and handle risky and sophisticated jobs he said in response to queries.

"There will be more opportunities for Omanis to work in the company. We have top quality Omani staff, 100 of them working outside the country sourcing suitable technology," he said.

Keeping in mind the larger economic interest of the country and PDO shareholders, a 100 percent Omanisation target by 2005 may not be achieved as planned earlier. Still the company is investing $20 million per year in Omanisation and training.

Malcolm said PDO will employ Enhanced Oil Recovery (EOR) techniques to increase production and oil exploration. It is currently looking at several EOR projects, mainly at Mukhaizana and Harweel. At Mukhaizana, it will rely on thermal recovery using superheated steam to raise the reservoir temperature so that the heavy oil there thins and flows better to the producing wells.

Al Harweel, the company will try gas injection with a view to increasing the amount of oil recovered out of a cluster of fields. The long-term EOR projects will yield concrete production results by 2007

"Our plan is to run pilot projects at these and other fields in the run up to 2007 and then look to scale up the projects to the entire filed based on the success of the pilots."

PDO will also use secondary recovery methods to boost oil production using water flooding technology - injecting massive quantities of water into the reservoirs to maintain pressure and drive the oil to the producing wells.

This will be a key strategy to increase black oil production in the medium term. By these methods, PDO will optimize the reservoirs and wells on stream.

In addition, the company will continue to explore new oil discoveries.

Source : Oman Daily Observer - 17th December, 2002


Oman LNG Signs Major Gas Deal with Union Fenosa
Tractabel to buy 0.8 MT LOF LNG

MUSCAT - Oman LNG has clinched a deal to sell 1.8 billion cubic metres (approximately 1.35 million tonnes) of liquefied natural gas (LNG) to the Spanish utility Union Fenosa Gas for delivery during 2004-2005.

An agreement to this effect was signed by Dr Agnus Cassens, General Manager and Chief Executive of Oman LNG, and Juan Varela, Executive Vice President of Union Fenosa Gas, at a ceremony held at the Muscat Intercontinental Hotel yesterday. The deal is the latest in a series of LNG marketing successes claimed by Oman LNG.

Earlier this month, the company inked an agreement with TotalFinaElf Gas & Power Limited covering the sale of 0.6 million tonnes of LNG for delivery to the European and American markets during 2003. It also sold two spot cargoes to Tokyo Electric, and is scheduled to sign a, major supply agreement with the energy firm Tractabel in the coming weeks. Dr Cassens hailed yesterday's agreement as a major step towards further consolidating the strong business relations between Oman LNG and Union Fenosa Gas.

He also voiced hope that it would spur further growth in the company's activities and develop its share in the Spanish market. "As a dynamic company and strategically well located to supply all major LNG markets, Oman LNG is particularly interested in Asia, Europe and America. Within Europe, Spain is expanding its LNG supply extensively and Union Fenosa Gas is at the forefront of this drive. We are proud to be part of this endeavour. This is in line with our business objective to expand and diversify our marketing portfolio."

In fact, the agreement with Union Fenosa Gas marks a significant milestone in a blossoming relationship between Oman and Spain covering energy supply and joint investment. In May this year, the Spanish utility signed a long-term agreement with the Omani government to buy 50 per cent of the output of the 3rd LNG Train project for a 20-year period. It will also be a partner in the development of the new LNG train.

Speaking at the signing ceremony, Union Fenosa' Varela said the agreement would help reinforce the excellent relations between Oman and Spain. "We are willing to collaborate to the highest extent with Oman LNG in the new joint venture company that will be created to build and manage the new LNG train. We hope to help make this state-of-the-art project become a reality," he remarked.

Varela described the latest agreement as a "bridge" that would enable the Spanish firm to cover the requirements of its actual and future customers during 2004-2005 before supplies from the 3rd LNG train commence in January 2006. The LNG (deal we are signing) today will help Union Fenosa Gas improve the quality and diversification of our gas procurement portfolio," he added. Oman LNG's Marketing & Shipping Manager, Harib al Kitani, praised the deal as the "biggest short-term agreement"clinched by Oman LNG date. It also marked the start a greater phase of cooperate between the two companies, added in remarks to the Observer. Of the 1.8 billion cubic metres (bcm) of LNG committed to Union Fenosa Gas roughly I bcm (approx. 0. 75 million tonnes) will be delivered during 2004, while t remainder 0.8 bcm (approx. million tonnes) will be shipped during 2005.

Significantly, Oman LNG also poised to sell 0.8 milliion tonnes of LNG to the energy, giant Tractabel during 2003 said Al Kitani. An agreement to this effect is expected to be signed next January. A number of government dignitaries attended yesterday's ceremony. Representing the Ministry of Oil and Gas was Khalifa bin Mubarak al Hinai, Technical Adviser to the Minister of Oil and Gas. Also present was Dr Mariano Capdevila, Spain's Honorary Consul in the Sultanate.

Source : Oman Daily Observer - 26th November, 2002




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