LNG

The Sultanate of Oman on the Arabian Peninsula said it signed up a Chinese liquefied natural gas buyer as its eighth new customer from the renewed production concession at Oman LNG.

Oman LNG has signed a binding term-sheet agreement with the China International and Chemical Company (Unipec) to supply 1 million tonnes per annum of LNG starting in 2025.

Unipec is the trading arm of major Chinese energy company China Petrochemical Corp., also known as Sinopec.

The Unipec agreement is similar to seven others it has signed since the turn of the year with customers in Europe and Asia, though the Chinese deal is just for four years while the others are for up to 10 years.

“Unipec has become the latest beneficiary of Omani LNG and marks the first LNG term deal with a Chinese firm and opens the doors for new opportunities in the Chinese market,” said a statement.

The agreement was signed in the capital Muscat between Hamed Al-Naamany, Chief Executive of Oman LNG, and Wang Yahang, General Manager of Unipec, in the presence of Salim Al-Aufi, Oman’s Minister of Energy and Minerals.

“The term-sheet signing with Unipec marks another milestone, where the Omani LNG will be creating new opportunities in China. Such an agreement will further enhance our position in the global energy industry and ensure we maintain our reputation as a reliable energy supplier worldwide,” said Al-Naamany.

Previous deals

The previous Omani LNG deal was signed at the end of January 2023 with Turkey’s state-owned Petroleum Pipeline Corp. (BOTAS) .

Oman will supply BOTAS with 1 MTPA of LNG for a 10-year period starting in 2025.

Similar deals to the BOTAS agreement have been signed with France’s TotalEnergies, Thailand’s oil and gas firm PTT, three Japanese buyers, JERA Co. Inc., Mitsui & Co. and Itochu Corp., and UK major Shell.

The new Oman LNG contracts are being lined up as the company plans to extend the lifespan of the liquefaction complex at Qalhat for another 10 years beyond its current concession to 2024.

The Omani LNG export facilities comprise the amalgamated three liquefaction Trains of Oman LNG and Qalhat LNG, which were merged in 2013 under the banner of Oman LNG.

The company has three liquefaction Trains at its site near Sur in the South Sharqiyah Governorate with a combined nameplate capacity of almost 11 MTPA.

The two-Train original Oman LNG plant has 7.1MT of capacity and the one-Train Qalhat plant has 3.6MT of capacity, though actual capacity is more after de-bottlenecking upgrades.

Oman had previous cut LNG output but the Ghazeer and Khazzan natural gas discoveries have in the last few years underpinned LNG production.

The gas has also opened the way for a proposed small-scale LNG plant to service the LNG bunkering market at the Port of Sohar.

That project envisages annual production capacity of 1 MTPA in Sohar, one of the largest industrial zones in the Middle East and well located for ships passing through the Gulf of Oman.

Oman LNG, the second main exporter in the Middle East, has named a new Chief Executive to replace Harib Al-Kitani, the long-standing incumbent who has overseen the return of stable feed-gas supplies and the updating of facilities and strategy.

A statement from the board at the Arabian Peninsula-based company said Al-Kitani would be stepping down and his successor and new CEO was named as Hamed Al-Numani.

Oman exports around 11 million tonnes per annum and its annual dispatch of cargoes covers the main importing nations.

“With a long successful journey of four decades in the industry, Al-Kitani’s experience has contributed tremendously in shaping Oman LNG as a reliable and trusted supplier,” said the board.

Al-Kitani is a veteran of the Sultanate of Oman’s energy industry and has been at Oman LNG from its inception in the late 1990s, holding a series of high-level positions.

“We wish him all the best in his retirement and a big thank you for all he has done to drive our success,” the statement added.

His successor Hamed Al-Numani comes with 20 years of energy industry experience with projects in Europe and the US.

Oman LNG’s customers include South Korea with around 3.9MT of annual supplies, Japan with about 3MT as well as other leading importers like China and India.

Cargo buyers also include Taiwan, Pakistan and Thailand.

The Thai national energy company, PTT Exploration and Production Public Company, has recently agreed to take a 20 percent stake in Oman’s upstream natural gas resources from BP of the UK centred on the onshore Block 61 comprising the ‎Khazzan field, which began production in 2017, and the Ghazeer field, onstream since October 2020.

Block 61, covering around 3,950 square kilometres in central Oman, contains the largest tight-gas ‎development in the Middle East.

Gas from the Block is sent for domestic consumption ‎into Oman’s national gas grid, while also boosting the availability of feed-gas for Oman ‎LNG.

Oman has also planned under Al-Kitani to become a major LNG bunkering nation from its port at Sohar in cooperation with French major Total.

The main Omani LNG export facilities are at the port of Sur. The plant comprises the three amalgamated liquefaction Trains of two former separate companies, Oman LNG and Qalhat LNG.

Al-Kitani also initiated plans for a de-bottlenecking project, whereby better output can be achieved by fixing inefficiencies, both technical and operational, and increasing Oman’s LNG output to 11.5 MTPA or more.