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.

Japan's Economy, Trade and Industry Minister (METI) Nishimura Yasutoshi said during a tour of the Middle East that Japanese trading houses would soon sign an LNG supply agreement with the Sultanate of Oman on the Arabian Peninsula.

McDermott, the US energy and LNG project engineering company, has outlined part of the scope of the planned Fujairah LNG production facility being developed in the fifth-largest emirate by area of the seven United Arab Emirates.

McDermott was awarded the contract by Abu Dhabi National Oil Co. (Adnoc) to provide front-end engineering and design for the plant.

The Fujairah project will be centred around a liquefaction plant with a total capacity of 9.6 million tonnes per annum.

Fujairah is located outside the Arabian Gulf on the Gulf of Oman. The shores of Fujairah extend for 70 kilometres along the coast from the city of Fujairah.

The emirate shares its boundaries with the emirates of Sharjah and Ras Al Khaimah to the west and the south respectively.

In the north, Fujairah shares its international border with the Sultanate of Oman, an established LNG producer supplying customers in Asia.

Electric drives

“The plant will be designed with electric drives for the liquefaction compressors and will incorporate several features that significantly reduce greenhouse-gas emissions, capitalizing on the experience McDermott,” said the Houston, Texas-based company.

McDermott said the Fujairah plant would benefit from the “robust capabilities and experience” of the US company in FEED performance.

Our biggest differentiator is our ability to execute this FEED on a fast-track basis incorporating all of the characteristics required to support the award of EPC contracts which are expected in 2023,” said Tareq Kawash, Senior Vice President for Onshore at McDermott.

McDermott was involved in initial phases of Adnoc’s LNG development in the late 1980s that resulted in the Das Island plant in Abu Dhabi, the second-largest emirate after Dubai.

The US company constructed the storage facilities for both LNG and liquified petroleum gas (LPG) on an EPC basis on Das Island.

“We are proud to continue our long history with Adnoc by playing an important role in helping to define the next phase of LNG development in the UAE,” added Kawash.

McDermott noted that it was one of the most experienced engineering and construction firms serving the LNG market and has delivered more than 30 LNG Pre-FEED and FEED projects over the past 10 years.

The Fujairah LNG facilities FEED will be performed by teams in McDermott's offices in London and the UAE.

Air Products, the LNG equipment-maker now developing mega-projects in the Middle East, has signed a joint venture contract for a standard project in the Sultanate of Oman 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.

The Oman LNG bunkering project for the Port of Sohar has advanced with the signing of a series of agreements for an Omani onshore gas field known as Block 10 and involving French major TotalEnergies, the Oman National Oil Company and Shell.

The Sultanate of Oman is 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.

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.

Bangladesh, the world’s newest liquefied natural gas importer with a floating regasification and storage unit provided by Excelerate Energy of the US at Moheshkhali Island on the Bay of Bengal, has signed an LNG supply agreement with the Sultanate of Oman.