LNG

A wholly owned subsidiary of US energy engineers McDermott has been awarded a significant contract by the Marsa liquefied natural gas project in the Sultanate of Oman on the Arabian Peninsula for storage and associated piping.

McDermott, based in Houston, Texas, has confirmed that its subsidiary CB&I will build a full containment concrete LNG storage tank at the Marsa project site at Oman's Port of Sohar.

French major TotalEnergies is going ahead with a large investment in the Marsa LNG project to serve as the first LNG bunkering hub in the Middle East.

The joint venture between TotalEnergies and Oman National Oil Company will build a liquefaction plant with 1 million tonnes per annum of output.

Feed-gas will come from Oman’s Mabrouk North-East field in the onshore Block 10 area.

Contractors

The main engineering, procurement and construction contracts have been awarded to France’s Technip Energies for the LNG plant and to CB&I for the 165,000 cubic metres capacity LNG storage tank.

The LNG is primarily intended to serve the marine fuel market in the Arabian Gulf region while LNG quantities not sold as bunker fuel will be off-taken by TotalEnergies and the Omani partner.

In addition to the storage tanks contract, CB&I will provide turnkey EPC services for the tank and associated piping.

Project delivery will be executed in Oman, where CB&I has been continually present since 1968, with support from CB&I's Dubai office.

“Through this project, CB&I will contribute to the construction of one of the lowest GHG emissions intensity LNG plants ever built,” said Cesar Canals, President and Chief Executive of CB&I.

“It supports our ambition to build storage for projects that will help provide reliable energy to markets,” Canals explained.

“It will also pave the way for similar storage opportunities in the future and continues our long history of execution excellence in the Middle East, specifically Oman,” he added.

Work is expected to commence with construction activities in the fourth quarter of 2024.

The overall Marsa bunkering fuel projects is targeted for completion in 2028.

UK major Shell said its subsidiary Shell Gas BV has signed an amended joint venture shareholder agreement in the Sultanate of Oman in the Arabian Peninsula for Oman LNG to extend the business beyond 2024.

Oman, the liquefied natural gas exporter with a range of new supply deals, is proceeding with an initial public offering through October 9 for 49 percent of Oman Gas Networks (OQGN), the holder of the concession covering natural gas pipeline infrastructure in the Arabian Peninsula Sultanate for the next 70 years.

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.

Turkey’s state-owned Petroleum Pipeline Corp. (BOTAS) has become the seventh company to sign a long-term supply agreement with Oman LNG in the Arabian Peninsula.

Elecnor, a Spanish infrastructure and energy group, has been awarded a contract to build a natural gas pipeline in Oman as the Sultanate in the Arabian Peninsula expands its domestic gas market as well as LNG exports and bunkering.

Oman, the Arabian Peninsula country and oil producer and long-standing LNG exporter, has been hit by a cyclone, causing major disruption with power cuts and flooding.

The Oil Ministry issued a statement saying that loadings and operations may be temporarily affected as “Cyclone Shaheen” moved along the Sea of Oman.

However, the Ministry said oil fields are far from the path of the cyclone and that there was unlikely to be interruptions to the production of oil nor of feed gas for LNG.

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

Oman exports around 11 million tonnes per annum and its 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.

Oman's National Multi Hazard Early Warning System said “Cyclone Shaheen” was accompanied by wind speeds of up to 116 kilometres per hour (72 mph) when it hit the country on October 3, with the cyclone causing heavy rainfall and high waves.

According to the authorities the areas affected by “Cyclone Shaheen” were in the wilayats of Musannah in South Al Batinah Governorate and Saham in North Al Batinah Governorate.

Rescues

There were no clear details of casualties, though dozens of people have been rescued by the Civil Defence and Ambulance Department (CDAA) in different areas.

Oman Air rescheduled 10 flights to an earlier departure time before the cyclone hit.

New gas fields have boosted feed-gas availability for LNG exports in the last few years from the onshore Block 61 comprising the ‎Khazzan field, which began production in 2017, and the Ghazeer field, onstream since October 2020.

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

Gas from the Block is also sent for domestic consumption ‎into Oman’s national gas grid.

Oman is also making progress with developing the Sohar Port and Freezone that is also the future site of an LNG bunkering project on the Arabian Sea coast and near the entry to the Gulf by the Strait of Hormuz.

Oman’s Sohar Port is one of the fastest-growing in the world because of its strategic location.

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.

UK major BP has sold a 20 percent stake for $2.6 ‎billion to Thailand’s national energy company in key tight natural gas fields onshore the Sultanate of Oman that enabled the Arabian Peninsula nation to stabilize then boost LNG exports over the past three years.

Sea-LNG, a global coalition led by energy and shipping companies backing the increased use of liquefied natural gas as a maritime fuel, has signed up a Port in Oman in the Arabian Peninsula aiming to be a main LNG base with its own production plant.