UAE's Sharjah National Oil Corporation (SNOC) said that first gas production from its Mahani onshore gas exploration project is delayed by up to two months due to the impact of the coronavirus outbreak.
In January, SNOC and Italy’s Eni announced the discovery of the gas and condensate field in the Mahani exploration prospect located onshore in the Area B Concession of Sharjah.
"In terms of the Mahani project, we are progressing according to plan - nonetheless we are expecting some minor delays in the startup," said Hatem Al Mosa, chief executive of SNOC, adding the delay is expected to be no more than a month or two and production will be brought online before year-end.
Meanwhile, Italy’s Eni, which said it is reviewing Middle East projects in light of the current market conditions, expects little impact on Mahani.
"We have completed all our procurement activities on Mahani and what could go late is of course the execution of the project... As that requires the presence of people and we all know what is happening around the world," Andrea Cozzi, managing director of ENI Sharjah B.V., said.
Eni holds a 50 per cent stake and operatorship in the concession.
Separately, SNOC awarded a US$40 million contract to oil services company Petrofac Facilities Management International, to develop a gas storage project in the emirate.
As part of the contract, Petrofac will develop a new high-pressure compressor facility, a high-pressure pipeline and flow lines to four existing wells in Moveyeid field, state-owned SNOC said.
“The project will allow us to store excess gas in the winter to satisfy the summer peak demand. It will also provide a readily available strategic reserve to respond to unexpected operational or market issues where connectivity and proximity become most critical,” Al Mosa said.
The company is planning to implement the project in phases, with the surface facilities to be commissioned by the end of 2020 and drilling in 2023. It will also evaluate the need for expanding the storage and delivery capacity of the project beyond 2023.
“Gas storage has been on the Sajaa Asset agenda since 2003," Al Mosa said. "SNOC owns the ideal reservoir for such a project in terms of size, proximity to pipeline infrastructure, connectivity and composition. However, the historic chronic shortage of gas to provide the cushion gas prevented the project from becoming a reality at that time."
Last month, Petrofac announced winning a $40 million engineering, procurement, construction and commissioning (EPCC) contract from SNOC but did not share more details.