28-02-04 Oman, which relies on oil for about 40 % of its gross domestic product, is considering building a plant that converts natural gas to liquid (GTL) products using supplies from Qatar, an Omani oil ministry official said. Oman may build the gas-to-liquids plant at Sohar, about 260 km (160 miles) northwest of the capital, Muscat, after the country starts taking supplies of Qatari gas via the UAE, Khalifa Mubarak Al Hinai, technical adviser at the oil ministry, said.
"The Dolphin project is coming up in the near future, so we should be able to import some of the gas from Qatar," Hinai said. Dolphin Energy, a joint venture of Occidental Petroleum, Total and Abu Dhabi, is a $ 3.5 bn project to pipe 2 bn cfpd of gas from Qatar to the UAE in 2006 and, later, to Oman.

Oman will be competing with Qatar, the world's No. 3 holder of gas reserves, which is seeking to become the world's largest exporter of LNG and producer of gas-to-liquids fuels such as diesel and naphtha. Total and Occidental want to profit from rising demand for gas in the Gulf to fuel power and water desalination stations, and industry.
Qatar already has agreed with South Africa's Sasol, Shell and ConocoPhillips to develop gas-to-liquids plants at a cost of more than $ 10 bn. Qatari gas supplies to Oman won't start until 2008 at the earliest, and the government expects to find more reserves within the country to supply a plant, Hinai said. He wouldn't say if Oman is talking to companies about developing a GTL plant.

Shell, the world's second-largest publicly traded oil company, owns 34 % of the national oil producer, Petroleum Development Oman. Hinai said he visited Shell's GTL Bintulu plant in Malaysia.
Oman wants to develop industry to diversify its economy away from oil and provide jobs for a population that is growing at about 2.2 % a year. The plant, which would produce methanol for export to Japan and Europe, would be Oman's first gas-to-liquids project, Hinai said.