Oman LNG signs liquefied gas supply contract with BP Singapore
The contract spans over seven years for lifting of 1.1 million tonnes a year of LNG
Oman LNG, a government-controlled joint venture energy firm, has signed a sales and purchase agreement for the supply of liquefied natural gas (LNG) to BP Singapore, as the sultanate looks to boost its export revenues to support its sagging economy.
The free-on-board (FOB) contract, commencing this month, will span a period of seven years for lifting 1.1 million tonnes per annum (mtpa), equivalent to approximately 18 LNG cargoes annually, Oman LNG said in a statement carried by state-run Oman News Agency. The contract is a boost to the global LNG market where Oman LNG currently contributes a significant amount, the company said without divulging the financial details of the deal.
“The revenues from this transaction will benefit Oman’s national economy and boost our GDP,” sid Mohammed bin Hamad al-Rumhy, Oman’s minister of oil and gas and chairman of Oman LNG. “This new agreement will not only unlock additional reserves but will also sustain our LNG business. Oman will continue to be a global preferred destination for sourcing clean energy.”
The LNG sector is the largest income earner for the sultanate after oil revenues, which have dwindled following the collapse in prices from mid-2014 onwards. Falling oil revenues have significantly impacted Oman's finances; the government has had to the tap international debt market several times in the recent years to plug its fiscal gap.
The government is attempting to revive its energy exports with a focus on the development of liquefied gas sector. The global LNG market is expected to expand much faster than the pipeline gas trade, largely due to its flexible nature and its accessibility for importing countries. As the global energy industry turns to renewables, LNG is getting more attention from importing nations for their mid- to long-term requirements.
Oman produced its first shipment of liquefied natural gas in 2000 after the first of an initial two-train plant began operations under Oman LNG; the company subsequently took over a third train in 2013 from Qalhat LNG, when the two operators merged.
Oman LNG is 51 per cent owned by the state of Oman and local and international energy majors, including Shell Gas, Total, Korea LNG, Mitsubishi Corporation, Mitsui & Company, Partex Corporation Oman, and Itochu.
Updated: January 21, 2018 12:08 PM