Oman Looks at CBM Potential

Oman’s Ministry of Oil and Gas (MOG) is considering investment in coal-bed methane (CBM) exploration and development in the coal-rich sultanate. As national oil companies (NOCs) in China, Indonesia and other Asian nations have done, it is looking for IOCs specialised in this field.

The MOG has been prompted by the discovery of huge CBM reserves in Asian/Pacific countries. CBM is 98-99 per cent pure methane which only requires dehydration of the gas (to remove the moisture) to achieve pipeline quality. Oman’s gas use has risen sharply to 1,700 bdfd as its population has grown and it has accelerated its industrialisation, with demand to reach 3,100 mmcfd by 2020.

Earlier this year, China has found a huge CBM pool in its Ordos Basin, said to contain 10.7 tcm of recoverable gas. Shell and PetroChina are exploring this basin. A tiny US firm has discovered 3.8 tcf of CBM in its very small part of the Ordos Basin.

Experts say the huge CBM finds in Australia and China could be just a “tip of the iceberg” in Asia/Pacific. In Australia, already several CBM-to-LNG ventures are being formed. LNG from CBM has lower calorific value than conventional methane; but a resultant price discount is making it a viable alternative to current LNG supplies.

Oman is rich in coal, with 122.7 million tonnes of reserves in Galan province being developed. These are to be partly used for coal-fired power generation. Finding and developing CBM in this and other parts of Oman will require expertise developed by specialised companies in North America, with which preliminary discussions have been undertaken.