Significant increase in gas revenues for Oman soon: Energy expert

Oman Monday 13/February/2023 10:35 AM
By: Times News Service
Significant increase in gas revenues for Oman soon: Energy expert
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Muscat: Mr. Ali bin Abdullah Al Riyami, the well-known Omani expert in the field of energy, said that the LNG revenues of the Sultanate of Oman are expected to increase in the coming period.

He added that gas revenues will contribute significantly to the domestic product, with new agreements to export liquefied natural gas at the beginning of 2025, to witness a qualitative boom in gas revenues.

During a radio interview with "Ma’a Al-Shabiba" show, he explained that the gas revenues would go to the Oman Integrated Gas Company, as it is the one that manages the gas in the Sultanate, and in the end it is an entirely government owned company.

“When comparing gas prices under the old contracts and gas prices according to the new contracts, the percentage of expected revenues from the new contracts will witness a significant increase due to the rise in gas prices from 1995 in which the old contracts were concluded compared to the present time when they have increased significantly. Logically, the revenues in the new contracts will be much higher than the revenues in the old contracts. The correlation of gas with oil prices in the new contracts is greater than the previous one, and it may reach 60% compared to the previous one, in which its correlation with oil in the old contracts did not exceed 10% ,” he added.

Al Riyami praised the efforts of the negotiating team, which is entrusted with the issue of gas negotiations, headed by HE Eng. Salem Al-Aufi, Minister of Energy and Minerals.

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Mr. Ali bin Abdullah Al Riyami also said that the countries that signed contracts to import natural gas from the Sultanate of Oman are primarily interested in importing from countries enjoying political stability.

During a radio interview with "Ma’a Al-Shabiba" show, Al Riyami explained that political stability guarantees the arrival of gas to the importing country.

He said, “Smooth, continuous and unhindered arrival of gas to the importing country are also among the important factors. In addition to the importance of political and international relations between countries. All of this is important in negotiation and the presence of a competitive advantage among competitors from gas producers.”

On the interest of the European market in Omani gas and the importance of having destinations of this kind for Omani gas, Ali Al Riyami said that this is linked to the situation in Europe at the present time and the interruption of Russian gas. “Europeans do not want to repeat the big mistake in importing gas from a single destination, which is Russia. They currently work to diversify gas import sources from more than one country.

Oman may be among the countries on the European table to import gas from, due to the Sultanate's proven professionalism in dealing with gas exports, its commitment to contracts concluded with importers in a rational manner and a great understanding of the market economy,” he added.