Overview of current projects under development in Oman & their link

with economic growth and the In- Country Value

Maktoom Al-Matani GM-Engineering & Technical Services Oman Gas Company Gas Arabia Summit -2012

His Majesty Sultan Qaboos Speech

Quotes from His Majesty Sultan Qaboos Speech to Omani Citizens on the Opening of The Council of Oman

(Majlis Oman) on 11th of November 2012

Dear Citizens .. The private sector is one of the basic pillars of development, both in the economic concept, which represents commerce, industry, agriculture, tourism, finance and the economy in general, as well as the social concept, which denotes human resources development, training, the upgrading of scientific and practical skills, the offering of new employment opportunities and incentives to take up jobs in the private sector

Current Government Gas Infrastructure

OXY MUKHAIZNA

24 TO SALALAH

SALALAH

AL KAMIL

32

20"

16"

MUSCAT

SOHAR PORT

GGP

SUR

SAIH NIHAYDA

GAS PLANT

O/QLNG

SAIH RAWL CENTRAL

PROCESSING PLANT

48"

28"

FAHUD

36"

Government Gas System

PDO pipeline

South Oman Gas Line

Power Plants

PDO demand

Other consumers

SALALAH POWER PLANT

SALALAH METHANOL

MIRBAT POWER PLANT

OMIFCO

Khauthar

Gas Plant

OXY

PTTEP

DOLPHIN

32"

Maktoom Rashid Al-Matani

Oman Natural Gas Overview

Oman Natural Gas Demand expected to exceed 100 MMstm3/d by 2021 excluding

Dqum.

Expected to remain a key fuel in power generation and industrial sector.

Government upfront strategic planning has ensured sustainable gas supply for years to come.

Government Strategy to open-up new gas blocks to new national and international Operators has enhanced Oman gas reserves.

With BP full development and other small fields on-stream Complex natural gas based industry will be the Focus in the incoming years.

Investments on unconventional Gas is becoming a Must to meet the gas Demand.

Some Key Challenges in future such as gas quality will need to be managed and will have impact on the operating cost of the gas processing facilities.

Existing Utilization of Gas

Natural

Gas

from

Pipeline

CONDENSATE

POWER PLANTS

LNG

INDUSTRIAL &

COMMERCIAL

OGC is only A Shipper

A Case for a change : Better Gas Utilization and more emphasis on In

Country Value Projects

In Country Value is A Key Driver for \

diversification of Gas Sector

Promotion of In-Country Value in gas sector which is of significant importance to the national economy of the country and that it is a government priority.

Encourages development of In country downstream industry

Further develop Oman private sector to build and operate downstream industries

Building local human resources capabilities, job creation, products and manufacturing

Large impact on human capital hence more ICVs generated per volume of gas

Key Economical Drivers for Growth and Expansion

9

NGL Values Growing With Crude Oil

0

5

10

15

20

25

30

1990 1993 1996 1999 2002 2005 2008 2011

LNG Crude LPG Naphtha

Comparative Fuel Values $US per MMBTU

LPG Demand is ~275 MMTA and Growing

LPG Demand, Million Tonnes

North America

Asia

Europe

Latin America

Middle East

Other

0

50

100

150

200

250

300

2000 2003 2006 2009 2012

LPG MAJOR TRADE FLOWS

LPG Major Trade Flows - 2011

W Europe

N America

ME

S America

Africa

NE Asia

SE Asia

Indian

Subcontinent

3,000 KTPY

CIS

Asia is largest consumer (92 MMTA).

North America second (60 MMTA)

Middle East Petrochemical demand for LPG growing rapidly.

Middle East is largest exporter

~27 MMTA. primarily to Asia.

Middle East exports anticipated to

grow despite increases in

domestic demand.

Naphtha Demand is ~6 MMB/D and Growing

LPG MAJOR TRADE FLOWS

LPG Major Trade Flows - 2011

W Europe

N America

ME

S America

Africa

NE Asia

SE Asia

Indian

Subcontinent

3,000 KTPY

CIS

Petrochemical naphtha used primarily in Asia and Europe owing to lack of gas and NGL feedstock.

Asia is largest consumer (3.9 MMB/D).

Asia is largest importer ~1.4 MMB/D.

Middle East is largest exporter ~740 MB/D.

North America

Asia

Europe

Latin America

Middle East

Other

0

1000

2000

3000

4000

5000

6000

7000

2000 2003 2006 2009 2012

Naphtha Demand, Thousand Barrels/Day

Natural Gas Feedstock Consumers

LNG 5-6

GTL 3-4

Methanol 3-4

Fertilizer 1-2

Aluminum 1-2

Polyolefins 18-20

Product prices and high capital costs limit the maximum breakeven feedstock price.

Feedstock represents a very large outlet for gas.

Breakeven

Gas price

$/MMBTU

Production of Polyolefins represents high value added. (ethane)

Global Chemicals and Plastics Trade

Trade growing at 5-6% per year

China largest importer

China production will increase,

but imports still growing.

Middle East is largest exporter

owing to low-cost feedstocks

Million Tonnes per Year

Major Added value by using city gas for cooking in Muscat

The spread between Natural Gas and LPG prices is forecasted to further grow. Hence, the macro-economical benefit of introducing a NG network is the amount NG consumed

With the introduction of an NG network the specifications for the LPG plants can become less strict. This will further increase the amount of released LPG by approximately 20%.

LPG substitution provides two financially relevant benefits

OGC has concluded the Concept phase and awaiting for FEED study commencement

Salalah LPG Extraction Project

Part of Omans plan to extend the natural gas value chain

OGC is concluding the Concept phase The plant is planned to be on-stream 2018

SAIH RAWL CPP

PDO

ABU TUBUL

OOCEP

KHAZAN/ MAKARM

BP

Salalah Extraction

Project

PROPANE

BUTANE

NAPHTHA

RESIDUE GAS

RABAB/ HAREEL

MIRBATt

NIMR COMPRESSOR

STATIOIN

24/32 SGL

OCCIDENTAL PDO

Further Value Enhancement NGL Extraction and Potential Steam Cracker

Integrate petrochemical plant into Sohar Refinery Complex.

Synergies enhance economics.

NGL Extraction

OXY MUKHAIZNA

24 TO SALALAH

SALALAH

AL KAMIL

32

20"

16"

MUSCAT

SOHAR PORT

GGP

SUR

SAIH NIHAYDA

GAS PLANT

O/QLNG

SAIH RAWL CENTRAL

PROCESSING PLANT

48"

28"

FAHUD

36"

Government Gas System

PDO pipeline

South Oman Gas Line

Power Plants

PDO demand

Other consumers

OMIFCO

Future Power Plants

Future demand

Ad Duqm area

Khauthar

Gas Plant

Future supply

Block 62

BP

OOCEP

BLOCK 60

OXY

PTTEP

DOLPHIN

Rabab

32"

Yibal

khuf

LPG Extraction

LPG Extraction

NGL Extraction

City Gas

NGL Extraction

Further Integration of Government Gas System

Petrochemical industry

New interlink pipeline between North and South will have the following benefits Mitigate impurities in the gas such as Nitrogen and to meet customers requirement. Can serve as a loop line to the existing interlink and maximize gas supply to North

grid in case of any trip major suppliers. Connect BP and other suppliers into an integrated gas network system. Provide operational flexibility and manage export gas quality such as Heating

values & capability to direct the gas based on demand requirements

It will be possible to control the overall gas integrated network from a central control center.

Possibility of considering NGL Extraction Facilities in Fahud area which can be sent to Sohar for upcoming industries.

New interlink pipeline benefits

OGC Leading midstream and downstream expansions and ICV Initiatives

All the ongoing OGC development projects and initiatives focus on maximizing benefits from the Gas Chain and on In Country Values Gains OGC is working with MOG and other stakeholders in identifying areas as growth nodes for spatial development initiatives

OGC and ORPIC started integrating upstream and Downstream Role players aspirations to have further value addition of the gas. With all these projects under development OGC puts itself in critical step of midstream and downstream industries expansion in Oman and the region.

Maktoom Rashid Al-Matani