Wednesday 27 / November / 2024
Muscat: Oman LNG has announced the signing of two binding term sheet agreements to supply 0.8 million metric tonnes per annum of LNG to Shell International Trading Middle East FZE and 0.75 million metric tonnes per annum of LNG to OQ Trading.
The step comes to leverage the strategic partnership between Oman LNG and other energy firms.
Based on these agreements, Shell International Trading Middle East FZE will receive 0.8 million metric tonnes per annum of LNG from the company for 10 years starting from 2025 whereas OQ Trading will receive 0.75 million metric tonnes per annum of LNG under a 4-year deal beginning in 2026.
Both agreements form significant steps in the history of Oman LNG and a major milestone, where they mark the completion of delivering 10.4 mtpa per annum and a total of 80 mtpa over a period of 10 years. This achieves Oman LNG’s goal to renew its contract beyond the year 2024 successfully in less than 12 months since the kickoff of this campaign.
With the previously agreed term sheet with Shell International Trading Middle East FZE for the offtake of another 0.8 million metric tonnes per year in January 2023, this additional term sheet makes Shell the biggest off-taker from Oman LNG beyond 2024. Additionally, it comes as a promising step for further collaborations with Oman’s primary oil and gas trading arm, OQ Trading.
Under the presence of Eng. Salim Al Aufi, Minister of Energy and Minerals, the agreements were signed by Hamed Al Naamany, CEO of Oman LNG, Walid Hadi, Senior Vice President and Country Chair Oman Shell, (on behalf of Shell International Trading Middle East FZE), and Wail Al Jamali, CEO of OQ Trading at Oman LNG Head Office in Muscat.
Speaking after the signing ceremony, Hamed Al Naamany, CEO of Oman LNG, said, "The term sheet agreements contribute to global energy security and sustain our position as a trusted supplier of reliable energy, where it facilitates business opportunities, and complements our objectives to establish partnerships and add value to the local economy. Additionally, this Global Marketing Campaign comes as an exceptional milestone in Oman LNG's rather stellar history despite the unprecedented volatile markets due to the geopolitical events and post-COVID challenges.”
The agreements are strengthened by the reputation and credibility of Oman LNG as a reliable and trusted LNG supplier around the globe, coupled with the effective management of business processes to produce clean energy delivered to customers around the world safely and reliably.
From his end, Walid Hadi, Senior Vice President and Country Chair, Oman Shell said: “Shell is proud of the role it has played in Oman LNG to date, as a shareholder and a technical advisor since its inception. We are proud that we will now become Oman LNG’s largest LNG purchaser as well as its largest private shareholder. This additional off-take term sheet signifies our deep commitment to continue pulling on all levers of Oman’s energy system to address the pressing trilemma of sustainability, affordability, and security. Simultaneously, it serves as a pivotal step in the evolution of our hydrocarbon enterprise, steering it toward a future characterized by both low carbon emissions and financial viability.”
Wail Al Jamali, CEO of OQT, added: “As the international energy and commodity trading vehicle of the Government of Oman, we are delighted to add this strategic off-take to our portfolio. The execution of this term sheet represents the first long-term agreement between our two organisations following many years of cooperation. We are committed to developing strong, sustainable relationships for the long-term benefit of our respective shareholders and the Sultanate of Oman.”
