Oman’s next LNG production project hinges on private investments from the world’s energy companies, the country’s Energy Minister said in an interview with Bloomberg.
The country’s economy relies heavily on oil and gas production and increasing exports would boost its finances, which were described as strained.
However, the government is no longer willing to provide state funds resulting in any future projects being financially viable.
Oman’s Ministry of Energy and Minerals is to open discussions with energy companies already involved in the country’s projects, including bp, Shell and TotalEnergies, in the first quarter of next year, Energy Minister, Salim Al-Aufi said.
“If we are unable to get enough gas suppliers participating, then the whole project will be cancelled, “he said, adding “it all depends on being able to secure - without government intervention- the gas feedstock to the fourth train. If we are unable to secure the gas feedstock, then we will call it a day.”
Oman’s public finances have been the weakest in the Gulf region for some time.
Since becoming the head of the country in January, 2020, Sultan Haitham bin Tariq has introduced measures to balance the books that were severely hit during the pandemic, resulting in its credit rating improving during the last few years.
The government holds majority stakes in Oman’s three LNG production facilities, together with minority investors, which include international energy companies and large gas buyers.
However, only companies that can commit to providing gas supplies to the planned fourth LNG train would be eligible to take a stake in the project.
Oman is currently conducting a study for the 3.8 mill tonnes per annum train to be located near the existing Qalhat facilities. If it becomes operational, the country’s LNG production would rise to 15.2 mill tonnes per annum.
It is the second largest Middle East LNG exporter behind Qatar.
