PDO and Petrofac sign Harweel project deal in Oman

Nov 15, 2005 01:00 AM

Petroleum Development Oman (PDO) and Petrofac, a leading international provider of oil and gas facilities services, signed a contract for one of the largest field-development projects ever undertaken by PDO.
The contract -- for the engineering, procurement and construction (EPC) of a major new oil and gas processing station as well as gas-injection facilities near Harweel, in south Oman -- formally launches PDO's first full-scale enhanced oil recovery (EOR) project.

The EPC contract, valued at just under $ 1 bn, will be executed by Petrofac's Engineering & Construction (E&C) division from its base in Sharjah, UAE, in conjunction with Galfar Engineering & Contracting, a local company.
Signing the agreement on behalf of PDO was John Malcolm, the company's managing director, and signing on behalf of Petrofac, was Ayman Asfari, the company's group chief executive. The ceremony was also attended by Nasser Al Jashmi, undersecretary of the Ministry of Oil and Gas, and member of the board of directors of PDO, Jan van Buitenen, PDO's EOR director, Steven van Rossem, Harweel project manager, and other representatives of PDO and Petrofac. Salim Al Araimi, chairman of Galfar and Dr P. Mohamed Ali, managing director of Galfar, also attended the function.

Asfari said: "We are delighted to have been awarded this major contract which builds upon Petrofac's relationships with the region's national oil companies and demonstrates our ability to leverage our strong regional presence. This will be the largest lump-sum contract undertaken by our E&C business and further demonstrates PDO's confidence in Petrofac's ability to deliver large-scale EPC projects."
Malcolm added: "The Harweel field development sets the trend for the company: EOR opens development opportunities for new fields and gives a new lease of life to our more mature fields. It represents a future growth area for PDO."

The Harweel EOR project currently revolves around the Zalzala oil field, which is one of a cluster of fields originally brought on stream in 2004. The principle of the EOR technique being applied -- miscible-gas injection -- is based on the blending of natural gas with the crude oil in the reservoir rock to form essentially one fluid.
The single-fluid nature of the mixture makes it move much more easily through the reservoir and into the producing wells. In essence, the gas injected into the reservoir acts as an oil solvent that "cleans" the reservoir of its oil. Without the miscible-gas injection, only about 10 % of the oil originally in place in the Harweel-cluster reservoirs could be expected to be recovered. But with the application of miscible-gas injection, the percentage of oil recovered can be increased to 33 % or more.

The oil/gas mixture produced from the Zalzala field will be separated into oil and gas components at the processing facilities. The oil will then be shipped by pipeline to the coast, whilst the gas will be recompressed and re-injected again and again until as much oil as economically feasible has been produced from the fields in the cluster.
"This EOR process is applied elsewhere in the world, but it has never before been done in Oman," pointed out Van Rossem. By any measure, the Harweel field-development project is massive. Van Rossem explained: "The reservoirs that will be tapped are spread out over an area of 250 sq km, and the wells will be linked via an extensive network of pipelines to a central processing facility.”

“The central processing facility itself will be a large plant -- more than 1 sq km of pipes, ducts, separators, pumps, compressors as well as other gas- and oil-processing facilities -- closer in complexity to a refinery than a normal oil-field facility. The gas-injection compressor will be one of the highest-rated, largest-capacity compressors in the oil industry today."
The sheer scale of the endeavour naturally requires a sizeable budget. But other factors have worked to make the Harweel project more expensive than most field-development projects that PDO has undertaken.

"The Harweel facilities will be processing very corrosive fluids, so much of the equipment has to be made of special corrosion-resistant alloys", says Van Rossem.
"Such materials are an order of magnitude more expensive than normal carbon steel and more difficult to fabricate and weld."

Source: Times of Oman
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