Oman Imports Gas for the first time ever, 30yrs after first gas from Yibal.

Oh, in my darkened state, performing death defying feats worthy of Cirque du Soleil to change light bulbs (here's a photo), I almost forgot there was actually some real news today!

Almost in time for the 30th anniversary of Oman's domestic gas production by PDO, Oman has finally got its first gas imports from Qatar.

Its a daily volume equivalent to about 8% of Oman's total gas produced domestically from Government owned fields and sold to downstream customers. As the agreement was signed in 2005, the price probably ain't too bad, especially at the lower oil prices these days. And Oman got to sell gas the other way for a few years too, which paid for the pipeline etc.

Rumour has it we could have gotten the gas earlier, except it was desperately needed in the UAE for power stations, and needed especially urgently with RAK Gas's gas processing plant in the UAE down after a small.... fire incident (no one hurt apparently), and electricity demand maxed out by the summer heat.

This is great news for Oman, as long as the price is right, which I don't know well enough to post. Oman needs the gas, and this will give a bit of breathing space for a few years at least.

PS: If anyone can find that price out, email me and I'll probably send you a big dragon thank you.

Dolphin Energy delivers first natural gas to Oman

Nov 1, 2008

WAM ABU DHABI, Nov. 1st, 2008: Dolphin Energy Limited today said it began to supply gas to Oman today, completing the strategic Qatar-UAE-Oman natural gas grid first proposed in 1999.

The company announced that Dolphin gas from Qatar was now flowing to the Sultanate for the very first time, as part of a 25 year Gas Sales Agreement (GSA) signed in 2005.

Al Dolphin's gas is produced offshore Qatar and is processed onshore at its Ras Laffan Gas Processing Plant. The gas is then compressed and pumped through the Export Pipeline to Dolphin's Receiving Facilities in Abu Dhabi, UAE, for distribution to customers.

Supplies for Oman subsequently flow across the country via the company's Eastern Gas Distribution System (EGDS) to Al Ain, where the EGDS connects with a new Omani pipeline on the Oman border.

Dolphin Energy began to deliver gas to UAE customers in July 2007: it has been supplying them with an average of 2 billion standard cubic feet of gas a day (scf/day) since February 2008. Oman will be receiving some 10 percent of this quantity, 200 million scf/day, under the terms of the GSA.

Dolphin Energy's CEO, Ahmed Ali Al Sayegh said: "This is a historic moment for Dolphin Energy - it is equally significant for the three nations who have embraced and supported the Dolphin Gas Project from the very beginning.

"We have always been grateful for Oman's supply of gas to our Al Ain-Fujairah pipeline project in 2004, which enabled us to deliver much needed gas to the Northern Emirates three to four years earlier than if we had waited for completion of our Qatar facilities.

"Now Dolphin, in its turn, can contribute to Oman's own future economic growth." Dolphin Energy Limited was created to develop substantial energy projects throughout the GCC and to create long-term economic wealth and new business opportunities for GCC citizens, far into the future.

Dolphin Energy's major strategic initiative, the Dolphin Project, involves the production and processing of natural gas from Qatar's North Field, and transportation of the dry gas by sub-sea export pipeline from Qatar to the UAE, which began in July 2007.

Oman - a nation of fat diabetics eating sugar & junk food?

A bit of a rant today. It always makes me feel sad when I see the contents of some of the baskets at the supermarket check out in Oman. Piled high with fake fruit drinks (you know the sort - mostly refined sugar and citric acid and not much fruit), fizzy drinks (1 cup of sugar in a can of coke), long-lasting sponge cakes (refined flour, sugar and fat), bags and bags of potato chips (starch, salt and ~40% fat), white rice, white flour, white bread, cheap pasta, corn oil. You’ll see these great kids, all bouncing around, begging for whatever extra sugary-crap they have at the checkout, while their parents are, lets say, packing more than a few spare pounds. And I'm sure a lot of the purchasing is well meaning, but just based on a serious lack of knowledge about how to eat well.

Diabetes is a huge problem in Oman. Reportedly around 15% of the adult population, and growing. (for comparison, the rate in Europe is half that). The reason is pretty simple – Omanis generally eat too much crap, don’t exercise enough, and too many adults are, lets face it, FAT. FAT FAT FAT. Its fortunate the national dress of Oman isn’t based on spandex and lycra I can tell you.

As body-mass index increases, the risk of diabetes rises exponentially. We can talk about ‘genetic predisposition’ but that often strikes me as a convenient excuse to avoid placing the blame where it belongs: our choices of life-style, diet and exercise. Instead of glowing PR when yet another fast food franchise opens in Oman, or when Pizza hut figures out how to get even more cheese down out throats, we should be complaining at yet another attempt to subvert the diets of our children. For a country with an acknowledged problem of diabetes, there seems to be more sugar consumed here than anywhere I’ve ever lived.

The Government should be doing a lot more to encourage healthier diets: fresh vegetables and fruit, whole grains (brown rice, whole wheat flours), skinless chicken and fish (not cooked to death either), olive and canola oil rather than corn and sunflower oils, and pure fruit juices. Hell, why not tax sugar and junk food?

But it’s not just Oman that continues to promote food that is bad for health. Here a story about Qatar too that mirrors what’s going on here. (and from the UAE based Gulf News – the Dragon’s preferred source of news about Oman!) Qataris on a fast track to serious health problems

Qataris on a fast track to serious health problems
Published: May 30
Doha: With the increasing popularity of fast food outlets among Qatari and expatriate residents, health officials have expressed concern about the long-term impact of junk food consumption on public health.

Since the first fast food outlet opened in 1995, at least 27 international fast food chains have set up hundreds of eateries across Qatar, changing the population's eating habits for good. The result is catastrophic, experts have warned, with diabetes spreading like wildfire among adults and children in Qatar.

"Obesity is the major risk factor leading to diabetes and the modern fast food culture is an important factor behind the increasing number of overweight children and adults all over the world.

"Unfortunately, governments and policy makers do not take the issue with the seriousness it deserves," said Samad Shar'a, honorary president of the International Diabetes Federation, during a recent visit to Doha.

Shar'a called for a total ban of junk food at least in school cafeterias, to protect youngsters from diabetes, a life-long condition that affects many in the Gulf. According to the World Health Organisation the prevalence of diabetes is 15 to 20 per cent in the Gulf region, against 8 to 11 per cent in South East Asian countries.

Rice and Qatari Gas, plus Some questions for the Majlis

Sorry for the lack of posts for a while – not only have I been super-busy, but also not a lot of news anyhow. So a couple of items on rice and imported gas.

Ministry tries to pretend there is no problem.
World food prices continue to soar, especially rice. But fear not Oman, the Ministry of Commerce and Industry is subsidising rice for the population, so there’s no need to worry. These statements are dutifully reported by the press here, with no actual analysis or questions.

Of course, in the current situation, I’d have to disagree with the official who described hoarding of rice as 'unjustified'. It seems highly justified. When the free market price of something you need increases by 70% in a few weeks, and seems likely to keep rising, buying in bulk seems a pretty good return on capital.

Plus, buying in bulk is what Oman residents have been doing for years. Whenever a nice and perhaps unusual imported item arrives, we Expats always tend to buy shedloads, as usually when you only buy 1 or 2, when you go back to the supermarket it’s missing for months! I can remember last year when the Carrs Cracker ship seemed to be delayed for about 4 or 5 months. The Dragon likes his cheese, and you can’t enjoy cheese without a decent cracker.

So, the country is now subsiding rice, oil, flour, cement and petrol... And nationalizing the cement distribution system. All this micro-economic distortion is very inefficient. Governments are usually pretty crap at the supermarket business and at guessing what people want and need. But the Government also seem unable to increase the wages of the general population. The Government’s rice is, of course, also pretty low quality, surprise surprise. If you want decent rice, its inflated world prices for you.

Ministry allays fears on rice stocks

MUSCAT The Ministry of Commerce and Industry dismissed rumours regarding shortage of rice in the local market.

An official in the ministry told Oman Tribune that the unjustified hoarding of such products would be counter-productive.

He warned the consumer against any such rumours. Rice is available in the market at the prices approved by the authority despite rise in rice prices across the world.

He called upon the consumers to depend on information issued only by the competent authorities.

The authority will ensure the supply of foodstuff to meet day-to-day demand in the market. Rice supply in the local market has been doubled due to high demand in recent days, he said. It is likely that the ministry officials would meet the rice importers after confirming that the prices of the commodity have gone up by 70 per cent in the last three weeks. The ministry would discuss with them the reasons behind the record rise in rice prices.

The ministry officials also made field visits to ensure that the shopkeepers are not manipulating the prices.

Several traders and consumers confirmed that there is big demand for rice due to continuous price rise. It has created instability in the local market, they said. Some of them accused the importers of listing high prices to capitalise on the situation. One trader alleged that the importers are behind artificial price rise as they are hoarding rice to keep the prices high.

Gas Imports delayed
In other news, the importation of gas from Qatar has been delayed by several months as Oman couldn’t get its shit together, according to reports today. Dolphin Energy gas supply to Oman delayed This will not be a significant problem, as Oman has plenty of domestic gas capacity in the short-term. Although at the moment the Government's brand new Kauther Gas plant is down, and has been for weeks with some sort of technical problem, my friends in the Ministry of Oil and Gas tell me Oman’s other fields can easily meet the demand. Of course, while the Kauther plant is down, the Omani Government is losing around $5 million a day from lost condensate production apparently. Ouch.

The article’s author doesn’t understand the problem though. The issue is not capacity (the amount of gas that the system can deliver on a given day), but long term volume. Gas is sold and committed years in advance. So while gas can be pumped today, that’s gas you can’t sell in 15 yrs time. It also means that spare capacity at the LNG plants in Sur can’t be utilized. Hopefully that will change when Iranian gas comes along in 8 years or so. Of course, the lack of gas didn't stop them selling super-cheap gas to the Sohar industries... Now here's a set of questions for the press, or perhaps a brave mmember of the Majlis Al Shura, for the appropriate Ministers:
'Excellencies, can you tell us: (1)at what price is gas being imported from Qatar, (2)what is the volume weighted average price of gas being supplied to The Methanol plants, Aluminium smelter, steel smelter and private cement companies? and (3)what is the profit Oman is losing from not having gas available to use our spare capacity at the LNG plants, taking into account both upstream and downstream profits?'

RAS LAFFAN, Qatar: Abu Dhabi-based Dolphin Energy will begin supplying natural gas to Oman in August or September, a few months later than planned as Oman has yet to complete the infrastructure.

"In August or September we expect the gas to come to Oman," Oman Oil Company chief executive Ahmed Al Wahaibi said at the inauguration of the Dolphin gas plant in Qatar.

The Dolphin project linking Qatar's giant North Field with the UAE and Oman was the first cross-border gas project in the Gulf region. It has pumped around two billion cubic feet a day of gas from Qatar to the UAE since February.

Oman is struggling to meet both domestic demand and its gas export commitments.

Dolphin has a contract to supply 200 million cubic feet a day of gas to Oman.

Omani officials said last month they expected gas supplies from Dolphin to start next month.

"There is some issue with the gas compression," said Al Wahaibi. "It is on our side of the pipeline," he said.

A gas compressing unit compresses gas to ease pumping through the pipeline.

Dolphin general manager Ibrahim Al Ansari said the firm was still working on gas metering stations in the UAE. "The gas is there ... on our side we are ready to export."

Oman to start importing gas in July

Breaking news. Oman will start importing Gas this year.

A couple of my colleagues in another Ministry - the Ministry of Oil and Gas - told me that Oman will finally start importing Gas from Qatar, via the UAE pipeline, around July this year. The gas pipeline to the UAE was built a few years ago to enable Oman to supply gas to a power station in Dubai while they waited for the gas to arrive from Qatar. It also enabled the pipe to be laid ostensibly to export gas from Oman, even though everyone knew it would be the source of imports eventually (and a careful reading of official releases makes that clear).

Imports will be around 5.2 million m3/d, equivalent to some 8% of Oman's current gas demand. What they wouldn't tell me is the price. I'll dig into that and report soon. What will be interesting is to compare the price for the imported gas with the prices given to the Sohar and Salalah Gas based industries. It will certainly be a lot less than the Government gets from the LNG plants at Sur. But it will emphasise the true subsidy the new industries are receiving.

How is Oman getting the gas at all, and why? A ha! Both good questions reader. I'll explain that once I sort out the price thing. It's a long story. And not all bad news for Oman.

Also to come this week, the strange story of the Methanol plant in Salalah and how the Government seems ready to subsidise it's gas even more than they are already!

The Dragon