$820m pact for Salalah LPG signed
July 11, 2017 | 9:31 PM
by ONA
The agreement was signed by Eng. Salim bin Nasser Al Oufi, Undersecretary of the Ministry of Oil and Gas and Eng. Isam bin Saud Al Zadjali, CEO of Oman Oil Company, owner of Oman Gas Company. -ONA
 
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Muscat: Oman Gas Company, the key player in Middle stream industries for Oman Oil Company yesterday signed at Crowne Plaza Hotel packages of agreements related to Salalah LPG project. Oman LNG signed an agreement with the Ministry of Oil and Gas on the right to build, own and operate the LPG extraction utilities.

The agreement was signed by Eng. Salim bin Nasser Al Oufi, Undersecretary of the Ministry of Oil and Gas and Eng. Isam bin Saud Al Zadjali, CEO of Oman Oil Company, owner of Oman Gas Company.

An agreement has also been signed with Oman Trading International Company to market the LPG and an agreement with Salalah Free Zone Company on the sub usufruct of about 20 hectares for the project at Salalah Free Zone. A lease agreement was signed with Salalah Port Services to allocate about 8 hectares for the LPG export facilities at Salalah Port. About $640 worth credit facilities agreements were also signed with a number of local, regional and international financial companies.

Eng. Salim bin Nasser Al Oufi, Undersecretary of the Ministry of Oil and Gas said that the estimated cost of the project is about $820 million and that it will produce about 300,000 tonnes of liquefied gas. He added that the project will create 140 job opportunities at the operation state. The annual income of the project is expected to be $200 million.

He also pointed out that the 300,000 tonness of liquefied gas that will be produced by the project are about 50% of the Sultanate's current product. The project, which is one of the promising projects in the Governorate of Dhofar, will take the liquid materials from the gas in Slalalah and maximize its value.

He noted that Oman Trading International Company has the right to market or distribute the produce quantities of Salalah LPG project. While about 10% will be utilized at the local market, 80%-90% will be exported through International Marketing Company.

On his part, Eng. Isam bin Saud Al Zadjali, CEO of Oman Oil Company said that Salalah LPG is a strategic project for Oman Oil Company. It is also in line with the endeavors made by the company to enhance the Sultanate's vision which aims at maximizing the added value of the natural resources. He added that the project is expected to enhance the existing and future petrochemical industries projects in the Sultanate. It will also contribute to setting up new ventures, generating job opportunities and meeting the LPG needs of the Governorate of Dhofar.

On his part, Sultan bin Hamad Al Bartamani, Acting GM for Oman Gas Company said that the company successfully managed to get the required credit facilities which reflects the confidence of the financiers in the project and its finance structure. The finance structure includes a number of elite local, regional and international financing organizations.

It should be noted that the financing of the project, which is expected to be operational by early 2020, has been secured through 8 local, regional and international banks namely BankMuscat, SCB, Bank Sohar, Qatar National Bank, Société Générale S.A. , Ahlibank, AB Corp, Ahlibank Bahrain.


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