Oman LNG plans third LNG train, sells total Train 2 volumes

By an OGJ Online correspondent

NICOSIA, Dec. 16 -- State-owned Oman LNG Co.'s (OLNG) third LNG train, which will have a production capacity of 3.3 million tonnes/year, is expected to begin production by first quarter 2006, increasing the Omani firm's output to about 10 million tonnes/year from the present 6.6 million tonnes/year.

A joint venture of Yokohama-based Chiyoda Corp. and Foster Wheeler Ltd. is developing the third train under terms of a contract awarded by Royal Dutch/Shell Group. The train will be located next to OLNG's existing Qalhat facilities.

Spanish electric power provider Union Fenosa SA, which has been aggressively developing markets and lining up gas supplies, signed a 20-year agreement with OLNG in May for the supply of LNG from the third train, marking its third supply contract with OLNG.

Sold out
Meanwhile, Omani LNG production nearly tripled in 2002 as its second train ramped up production, and, with the recent signing of its second contract with Union Fenosa for LNG supply, Oman LNG completely sold out its current capacity to long-term purchasers and spot buyers.

Under terms of the new agreement, OLNG will provide Fenosa with 1 billion cu m of LNG in 2004 and an additional 800 million cu m in 2005. OLNG's Lakshmi carrier will transport the shipments.

Other purchasers include OLNG's main customer, Korea Gas Corp. (Kogas), which contracted in April 2000 for 4.1 million tonnes/year LNG over a 25-year period.

Japan's Osaka Gas Co. also buys from OLNG under terms of a 25-year, 700,000 tonnes/year contract signed in November 2000.

In addition, the Omani company agreed in early November to deliver 600,000 tonnes of LNG to TotalFinaElf Gas & Power Ltd. for delivery to the European and American markets next year, and in mid-November, Belgium-based Tractebel SA secured medium-term supplies of 600,000 tonnes of LNG from OLNG for sale into North America, Europe, and Asia.

Tractebel, a division of France's Suez Group, said it would use the newly chartered Hoegh Galleon and Excalibur LNG carriers to transport its gas.

Gaz de France signed a contract with OLNG to purchase nine spot cargos of 138,000 cu m of LNG each for delivery to the Montoir-de-Bretagne terminal during March-December of this year, while Tokyo Electric has also signed up for two spot cargos.

OLNG is a consortium of the Government of Oman 51%, Shell 30%, TotalFinaElf 5.54%, Korea LNG 5%, Oman's Partex Oil & Gas (Holdings) Corp. 2%, and Japanese firms Mitsubishi Corp. 2.77%, Mitsui & Co. Ltd. 2.77%, and Itochu Corp. 0.92%.

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