Britain's BP and partner Oman Oil have signed an agreement to develop a second phase of the Khazzan natural gas field, taking the estimated investment in the project to $16 billion, the company said.

The agreement with the government of Oman will add more than 1,000 sq km to the original 2,700 sq km block, which is expected to start delivering gas in late 2017, BP said.

The second phase is expected to come on stream in 2020, and together they are expected to produce 1.5 billion cu ft of gas per day, the oil major said in a statement.

BP is the operator of the block, with a 60 per cent interest. State-owned Oman Oil holds the other 40 percent. – Reuters