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Oman signs pact with BP Singapore for selling LNG
January 20, 2018 | 5:22 PM
by ONA
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Muscat: Oman LNG and BP Singapore have signed a major sales and purchase agreement (SPA) for supplying liquefied natural gas (LNG) to the latter.

The agreement, a free-on-board (FOB) contract starting from January 2018, will span over a period of seven years for lifting 1.1 million tonnes per annum (mtpa), which is equivalent to approximately 18 LNG cargoes a year. It will be an important boost to the global LNG market where Oman LNG currently contributes a significant amount.

“The new agreement will not only unlock additional reserves but will also sustain our LNG business and expand our LNG business. Oman will continue to be a global preferred destination for sourcing clean energy,” said Mohammed Dr. Al Rumhy, Minister of Oil and Gas and the chairman of Oman LNG.

“The revenues from this transaction will benefit Oman’s national economy and boost our gross domestic product and will also boost efforts towards In-Country Value (ICV) and Corporate Social Responsibility (CSR), all of which are significant drivers to the socio-economic fabric of the Sultanate.”



The announcement was made by Harib Al Kitani, chief executive officer (CEO) of Oman LNG, and Jonathan Shepard, chief operating officer (COO) of BP LNG. The event was also attended by Al Rumhy as well as several top-level officials from the oil and gas industry in Oman.

The LNG plant at Qalhat, in Sur, has the capacity to receive and process additional volumes as it has recently been operating with some spare capacity.

“This agreement is a game changer for Oman and Oman LNG where it will provide benefits for the Sultanate through the export of new volumes of feed gas to customers in need of reliable, safe, clean energy. Another win is that the agreement will enable the plant to operate at full capacity and thus create more value and utilising the asset at maximum capacity. From the returns generated, Oman LNG can further invest in social projects and ICV opportunities enhancing the society of Oman at large,” said Al Kitani. “Our aim is to serve the community and contribute to all segments of the society through the exports of LNG.”

“BP is pleased to expand its longstanding relationship with Oman LNG through the conclusion of this LNG sale and purchase agreement. Following the commencement of production from the Khazzan gas field, this development deepens BP’s commitment to Oman and strengthens our support for the Sultanate’s gas sector,” said Alan Haywood, chief executive officer of BP Integrated Supply and Trading.

This agreement is strengthened by the reputation and credibility of Oman LNG as a reliable and trusted supplier, coupled with the effective management of all the business processes within Oman LNG, to produce clean energy, which is safely delivered to customers around the world.

Oman’s liquefied natural gas industry was born out of the vision of His Majesty Sultan Qaboos bin Said to diversify the country’s economy and has attracted large revenue by harnessing natural gas resources for export as liquefied natural gas. The country produced its first shipment of liquefied natural gas in 2000 after the first of an initial two-train plant began operations under Oman LNG. With a third train under Qalhat LNG, liquefied natural gas has played an even greater role in contributing to the national economy as the two companies, that integrated in 2013 and now operate as Oman LNG, have worked intensely with outstanding success to drive their organisations forward.

Oman LNG and BP have a well-established partnership dating back many years. A recent collaboration, in 2015, saw the two companies sign a multi-year partnership to support the professional training of Omani youths whereby the final term of BP’s Khazzan Technicians Training Programme is completed by a year of field experience provided by Oman LNG at their world-class plant in Qalhat. Through on-the-job training at the facilities within Oman, the programme supports nurturing the Omani youth locally while simultaneously contributing to in-country value, which is an additional benefit.

Oman LNG operates as a joint venture with a shareholding structure comprising the Government of Oman (51 per cent), Shell Gas BV (30 per cent), Total SA (5.54 per cent), Korea LNG (5 per cent), Mitsubishi Corporation (2.77 per cent), Mitsui & Co. (2.77 per cent), Partex (Oman) Corporation (2 per cent), and Itochu (0.92 per cent).



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