Oman is set to make a significantly large investment to set up a solar project to boost natural gas production from its oilfields.
Energy giants Shell and Total are set to partner with the Oman government to set up a large-scale solar project to boost natural gas production. Petroleum Development Oman will be the financial partner to the project, while California-based GlassPoint Solar will be the technology provider.
The solar project, with an estimated capacity of 1,021 MW, is not expected to generate electricity but generate steam, which would be injected into the oil wells to produce oil. GlassPoint has been experimenting with such solar projects to boost oil and natural gas production. Royal Dutch Shell and State General Reserve Fund of Oman teamed up to invest $53 million into the company last year.
Glasspoint Solar manufactures and installs aluminium mirrors near oil fields that concentrate solar radiation on insulated tubes containing water. The steam generated from heating the water is injected into oil fields to recover heavy crude oil or natural gas. The use of renewable energy like solar power makes great economic sense, as the fuel cost associated with this enhanced oil recovery technology is practically zero.
GlassPoint has been running a demonstration project in Oman since 2012 and plans to setup local manufacturing and supply chain infrastructure. The company claims that solar power steam generators can reduce gas consumption and greenhouse gas emissions by 80% each in such enhanced oil and natural gas recovery projects.
The project is expected to become operational in 2017. Oman is an oil-rich country but lacks in significant natural gas reserves. The country is now looking to significantly increase the natural gas production from oilfields by pumping high-pressure steam into ageing wells.