Oman: TotalEnergies and Shell to produce natural gas in Block 10 site

Both companies will develop several projects in the country to capitalize on its sustainable energy production potential.

TotalEnergies has signed a series of agreements with the Ministry of Energy and Minerals of the Sultanate of Oman for the sustainable development of the country’s natural gas resources. The negotiations include several projects for the production, processing and sale of natural gas from its Block 10 gas field located in Saih Rawl and with Shell as the primary operator.

The agreements include:

. The establishment of Marsa LNG, an integrated company between TotalEnergies (80%) and Oman National Oil Company, OQ (20%). The new firm will produce natural gas from Block 10, with a view to subsequently develop a low-carbon LNG plant in Sohar, powered by solar electricity, for the production of LNG for bunker fuel.

. A concession agreement for Block 10, to develop and produce natural gas from this block. Marsa LNG will hold a 33.19% interest in Block 10, together with its partners OQ (13.36%) and Shell Integrated Gas Oman B.V. (53.45%). TotalEnergies’ production from Block 10 is expected to reach approximately 24,000 boe/d in 2023.

. A Gas Sales Agreement, under which Marsa LNG will sell natural gas from Block 10 to the Government of Sultanate of Oman, for a duration of 18 years or until the start-up of Marsa LNG plant.

“We are pleased to sign these agreements with the Sultanate of Oman and further develop our activities in the country while contributing to develop its energy sector in a more sustainable manner”, said Laurent Vivier, Senior Vice President Middle East and North Africa, Exploration and Production, at TotalEnergies.

Shell’s role in Oman’s natural gas development

The concession establishes Shell Integrated Gas Oman BV as the operator of Block 10. For the initial phase, Petroleum Development Oman (PDO) will build the infrastructure for the project, including the main pipeline to the Saih Rawl gas processing facility, on behalf of the Block 10 venture partners.

“These agreements represent a major step for Shell and for our relationship with Oman. They generate value and strengthen our Integrated Gas business, which we need to deliver the energy Oman and the world need today. And we are looking at how Shell can help Oman with developing low-carbon energy in the future,” said Wael Sawan, Shell Integrated Gas, Renewables and Energy Solutions Director.

The venture will drill and hook up wells to maintain the production beyond the initial phase. The block is expected to reach production of 0.5 billion standard cubic feet of gas per day, while its operations are expected to start in the next two years. Shell’s entry into this block signifies a further commitment to Oman, while enhancing and diversifying its gas supply. In addition, Shell and Energy Development Oman (EDO) signed an agreement to process the natural gas from Block 10 in EDO’s Saih Rawl facility.

“We share a long and strategic collaboration with Shell and our other partners. This project will further maximise the potential of Oman’s energy industry, in line with the Sultanate’s strategy to create growth opportunities across all energy streams and in line with Oman’s Vision 2040 priorities,” said H.E. Dr Mohammed Al Rumhi, Minister of Energy and Minerals in Oman.

In parallel to the development of Block 10, both parties have agreed that Shell will also develop options for a separate downstream gas project. This could be an opportunity for Shell to produce and sell low-carbon products and support Oman’s hydrogen development.