Under the auspices of His Excellency Nasser bin Khamis al Jashmi, Undersecretary at the Ministry of Oil and Gas, two major engineering, procurement and construction (EPC) contracts for the Qarn Alam steam-injection project of Petroleum Development Oman (PDO) were signed today at an official ceremony held at the Oil and Gas Exhibition Centre.

A contract for “on plot” facilities (those erected at the field site) was signed with Dodsal and a contract for “off plot” facilities (the oil and water flowlines and associated hardware outside of the field site) was signed with Galfar Engineering & Contracting.

The two contracts were signed from PDO’s side by Mr. John Malcolm, the company’s Managing Director, and, from the contractors’ side, by Mr R. A Kilachand, Chairman of Dodsal, and Mr Salim bin Said al Uraimi, Chairman of Galfar.

The Qarn Alam steam-injection project is the world’s first full-field steam-injection project based on thermally assisted gas/oil gravity drainage (TAGOGD) in a fractured carbonate field. The project scope includes drilling some 150 wells and installing facilities to treat water and generate around 18,000 tonnes per day of steam. Additional facilities will be built to process the incremental oil and gas produced at the field as well as disposing of excess produced water in deep reservoirs. Close to 220 kilometres of pipelines and flowlines will be installed to connect these facilities with the wells for water supply, oil production, steam injection and water disposal.

The Qarn Alam field, which was discovered in 1972 and started producing oil in 1975, contains a moderately viscous crude in rock that is rather impervious to its flow. What little oil does flow out of the rock formation does so under the influence of gravity, through a network of cracks that criss-cross the formation. The EOR recovery process being applied – TAGOGD – is based on injecting steam into the formation’s fractures to heat the low-permeability oil-bearing rock. As the rock is heated, gas is liberated and the viscosity of the oil is reduced, flowing much more easily into the fractures under the action of gravity. The fractures thus serve as conduits for both the injected steam and the produced oil. Unlike a conventional steam-injection project, in which the steam serves to drive oil to producing wells, the steam at Qarn Alam is used as merely a heating agent to enhance the existing gravity drainage mechanism. This feature of the project allows the number of wells, and hence development costs, to be kept to a minimum.

Most of the steam will be generated by waste heat recovery from the existing Qarn Alam Power Station, thereby significantly reducing the project’s carbon dioxide emissions and saving on gas consumption. This is part of PDO’s strategy to preserve the environment while benefiting from the waste heat. The start-up date of all facilities will be around 2010.

“The contracts signed today represent the successful conclusion of an innovative contracting strategy in difficult market conditions” commented Saif bin Hamed al Hinai, Oil Director for the Company’s northern assets.

They will also distinguish PDO from its peer oil companies around the world. EOR methods fall into three categories: thermal, chemical and miscible gas. “PDO is one of the few companies in the world that can claim to be carrying out at least one major field-development project based on each of the three EOR types”, commented Mr Malcolm. “We now have a thermal project at Qarn Alam, a chemical project at Marmul and a miscible-gas project at Harweel.”