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PDO floats tender for major flare gas monetisation scheme

6 August 2026

 

Petroleum Development Oman (PDO) has launched a major scheme to monetise gas flared across two of its largest hydrocarbon-producing zones in the sultanate. The initiative aligns with PDO’s commitment to achieve zero routine flaring and net-zero methane emissions by 2030, on the way to attaining full carbon neutrality by 2050.

The scheme involves the monetisation of flare gas and gas associated with oil production in the Qarn Alam cluster and the Fahud field, both of which fall under PDO’s northern portfolio within its main hydrocarbon concession area, Block 6.

The scope of the flare gas and associated gas monetisation scheme has been divided into two parts. Bundle A involves the offtake of associated gas from the Wadi Umayri oil field development, located in the Qarn Alam cluster. Bundle B relates to the monetisation of flare gas and natural gas liquids (NGLs) from the Fahud North Oman Crude Stabilisation (FNOCS) facility, located at the Fahud field.

PDO issued the request for proposal document for the flare gas monetisation scheme on 21 July, inviting local and international developers to submit technical and commercial proposals by 25 August.

Developers have the option of submitting proposals for the complete design, financing, construction, operation and maintenance of offtake or monetisation facilities for one or both bundles. PDO will evaluate proposals for each bundle separately and award contracts independently.

PDO is the operator of Block 6, Oman’s largest and most prolific hydrocarbon concession. Situated onshore and covering an area of 75,119 square kilometres, Block 6 contains 202 oil fields and 43 gas fields, with PDO producing approximately 680,000 barrels a day (b/d) of oil and condensate from those fields.

The Omani government holds a 60% stake in PDO through Energy Development Oman (EDO). The other shareholders are UK-based Shell (34%), France’s TotalEnergies (4%) and Thailand’s state-owned PTTEP (2%).

Scope of Bundle A

The Wadi Umayri field development, located within the Qarn Alam cluster, produces crude oil from the Lekhwair, Shuaiba and Sudair reservoirs. A permanent processing facility is planned to come onstream by the first quarter of 2030.

As a by-product of oil production, the development will generate associated gas at an initial rate of approximately 60,000 to 68,000 standard cubic metres a day (cm/d), declining over field life.

PDO will install a sweetening unit as part of its own scope to meet Oman’s regulatory requirement of all gas with sulphur dioxide (SO₂) concentrations above 0.035 g/m³ to be treated prior to any disposal.

At the delivery point (battery limit flange), the gas made available to the future developer will consist of a blended stream from two sources: approximately 80% sweetened separator gas and 20% flashed gas recovered from atmospheric storage tanks. This blended gas composition forms the basis for downstream utilisation, processing, or disposal considerations under the development concept.

The duration of the contract to be awarded by PDO to the developer is 10 years.

The scope of work on Bundle A is split between PDO and the developer, and covers the following:

PDO tie-in scope:

  • Tie-in works from the production separator and oil tank to the defined delivery point (flange at battery limit), including piping, metering and ESD/control valves.
  • Sweetening unit upstream of the delivery point to treat the main gas stream and meet regulatory SO₂ limits for any non-routine flaring events.
  • Allocate a designated plot plan adjacent to the permanent facility, at no cost to the developer.
  • The gas delivery point is defined as the flange at PDO’s battery limit of the Wadi Umayri permanent facility. Gas will be supplied as-is at approximately 1.00 bar, with PDO bearing no obligation to provide gas at higher pressure or low hydrogen sulphide (H₂S) concentration.

Developer scope:

  • Design, build, maintain and operate the gas monetisation system outside PDO’s battery limit.
  • Provide all equipment, infrastructure, compression, conditioning and downstream handling from the delivery point onward.
  • Bear full capital expenditure (capex), operational expenditure (opex), leases, health, safety and environment (HSE), and regulatory responsibilities for all developer scope.
  • Self-generation of all required utilities, such as power, water and chemicals.
  • Handling, treatment and disposal of all product and by-product streams.
Scope of Bundle B

FNOCS is a centralised processing facility at the Fahud field. The facility processes associated hydrocarbons from producing fields in PDO’s northern portfolio, generating two primary streams: produced NGL stream at FNOCS is blended into the Main Oil Line (MOL), while the produced fuel gas is supplied to the Fahud power plant.

The continued flaring of NGLs at FNOCS is an interim risk-mitigation measure and not a sustainable operating solution. To identify a viable long-term outlet for these volumes, and to meet PDO’s broader strategy to eliminate flaring and comply with its zero routine flaring commitment by 2030, the company is seeking third-party developers to monetise hydrocarbon streams currently being flared at FNOCS.

PDO’s target is to secure an attractive commercial structure to stop flaring by offering two independently proposed operating options:

Option 1 – Monetise the flare gas stream, upstream of main gas compressor: Take the currently flared gas, at an output rate of 90,000 standard cm/d, as-is in the current interim operating mode. Developer to design, build and operate a gas monetisation system outside PDO’s battery limit. This option has the highest zero routine flaring compliance impact and eliminates the need for re-operating the main gas compressor and its associated equipment.

Option 2 – Monetise NGL + fuel gas: Restart the main gas compressor and stabiliser to separate NGL and fuel gas streams for sale. Vendor takes NGL (downstream of stabiliser), at a current rate of 106,000 standard cm/d and fuel gas (upstream of Fahud power plant), at a current rate of 44,000 standard cm/d, through a combined commercial structure.

The duration of the contract to be awarded by PDO to the developer for Bundle B is five years, with the proposed facility to come onstream by the first quarter of 2029.

The scope of work on Bundle B is also split between PDO and the developer, and covers the following:

PDO tie-in scope:

Approximately 200 metres of piping to FNOCS fence, including control/ESD/relief valves and a flowmeter.

Allocate a designated plot plan approximately 4km from the existing FNOCS facility for the developer’s monetisation system.

  • The delivery point for option 1 is defined as the flange at FNOCS’s fence, upstream of the main gas compressor. The delivery points for option 2 are: (i) the NGL outlet downstream of the stabiliser, and (ii) the fuel gas outlet upstream of the Fahud power plant. Streams from both options will be supplied as-is at approximately 1.00 bar, with PDO bearing no obligation to provide gas at higher pressure or low H₂S concentration.

Developer scope:

  • Design, build, maintain and operate the gas monetisation system outside PDO’s battery limit.
  • Provide all equipment, infrastructure, compression, conditioning and downstream handling from the delivery point onward.
  • Bear full capital expenditure (capex), operational expenditure (opex), leases, health, safety and environment (HSE), and regulatory responsibilities for all developer scope.
  • Self-generation of all required utilities, such as power, water,and chemicals.
  • Handling, treatment and disposal of all product and by-product streams.

PDO has been striving to curb, and eventually end, flaring across its operations for several years, as part of its own targets, as well as in alignment with the environmental sustainability framework under Oman Vision 2040.

In May last year, PDO initiated a flare gas recovery project at the Zulaiyah station in Hazar South in partnership with Hungary-based Enerhash, which aims to convert flare gas into a sustainable energy source through modular digital mining infrastructure.

Enerhash’s technology powers containerised data centres directly with flare gas, offering a decentralised solution suitable for remote oil fields.

The project is designed to avoid around 25,000 tonnes a year of carbon-dioxide-equivalent emissions, and builds on PDO’s earlier South AP flare recovery project, which sought vendors to recover gas from atmospheric dehydration tanks across sites such as Bahja, Rima, Amal, Marmul and Nimr.

https://image.digitalinsightresearch.in/uploads/NewsArticle/18157702/main4946.jpg
Indrajit Sen

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