BP has agreed a price for the gas produced from a huge gas field in Oman.
The energy giant has been negotiating for months over the price it would receive from the local market for the tight gas at Khazzan, but has now signed a framework agreement with the Oman Government.
BP would not reveal the price, but a spokesman said: “We are pleased to have reached a price agreement that is acceptable to the government of Oman and delivers value to BP.
“This commercial agreement provides a strong basis for BP to move ahead toward a final investment decision on Khazzan, which we hope to accomplish by the end of 2013.”
BP has already spent hundreds of millions of pounds on the project since winning it in 2007, but had to agree a sales price that covers the relatively high cost of extracting gas trapped in rocks deep underground before committing to it.
Khazzan is expected to start production in 2017 and reach full output of around 1billion cubic feet of gas per day a year later.
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