Oman signs LNG supply contracts with three Japanese firms

Eric Watkins
Senior Correspondent

LOS ANGELES, July 9 -- Oman's state-owned Qalhat LNG SAOC will supply LNG to the Far East under the terms of contracts announced by three Japanese firms, adding a further boost in revenues for the natural gas-rich Arab country.

In separate statements, Japan's Itochu Corp. and Osaka Gas Co. said they already have signed contracts with Qalhat LNG, while Mitsubishi Corp. said its deal was to go through on July 1.

Under terms of the agreements, Itochu said it will purchase 700,000 tonnes/year (t/y) from Qalhat for 20 years starting in 2006, while Osaka Gas will buy around 800,000 t/y for 17 years starting in 2009.

Mitsubishi said it will purchase 800,000 t/y for 15 years, which can be extended for five years if mutually agreed.

Spokesmen for two of the companies said the agreements did not set specific purchase prices, which will instead be decided on the basis of market prices.

However, without naming its sources, Japan's Nihon Keizai Shimbun newspaper reported June 30 that the three firms would purchase a total of 2.3 million t/y—worth more than 60 billion yen based on current LNG prices.

The Japanese sales agreements follow reports of a steady upsurge in Oman's production of LNG and its revenues from export sales.

In June, Oman's total LNG production as of the end of April increased to 247.5 bcf from 223.8 bcf in 2003, according to Omani official figures.

Oman also announced a 37% increase in the country's LNG revenues, which reached $35.6 million in the first 4 months of this year, up from $26 million in the same period last year. For the year ending in April, Oman's LNG revenues came to $328.6 million.

To handle the upsurge in production and exports of LNG, Oman also has announced it will charter an 138,000 cu m LNG carrier and subcharter the vessel to Oman LNG at a cost of $67,000/day. The vessel will join two others—the Sohar and the Muscat—already owned by the government.

In announcing the charter arrangements, Oman's Minister of National Economy Ahmed bin Abdulnabi Macki said the Sultanate had taken important steps to expand its LNG transport fleet to cope with additional production from Oman LNG's projected Train 3 at Qalhat.

Oman LNG is currently producing 6.6 million t/y of LNG from its existing two trains at Qalhat. The third train is due for completion by the end of 2005, and exports are set to begin in early 2006.

The Qalhat LNG Terminal is on Oman's northeast coast at Sur, some 75 nautical miles southeast of Muscat and 12 nautical miles from Ras al Hadd. The terminal, well away from the busy Strait of Hormuz, already caters to the growing demand for LNG in the Far East.

In its report of the new sales, Nihon Keizai Shimbun observed that, "The embarkation port is outside the Straits of Hormuz and transport via the port is less vulnerable to conflicts in the Middle East."

According to the Organisation of Arab Petroleum Exporting Countries, the latest available figures show Oman has proven gas reserves of about 30.3 tcf.

Related Articles

Woodside to buy Apache's interests in Wheatstone, Kitimat LNG for $2.75 billion

12/22/2014 Woodside Petroleum Ltd. has agreed to acquire interest in the Wheatstone LNG and Kitimat LNG projects, respectively in Western Australia and Britis...

Woodside delays Browse FLNG development schedule

12/17/2014 Woodside Petroleum Ltd. has reported it expects to enter front-end engineering and design phase for the proposed Browse floating LNG (FLNG) develop...

Woodside to buy Apache’s interests in Wheatstone, Kitimat LNG for $2.75 billion

12/15/2014 Woodside Petroleum Ltd. has agreed to acquire interest in the Wheatstone LNG and Kitimat LNG projects, respectively in Western Australia and Britis...

Watching Government: Russia: On the ropes?

12/15/2014 Russia's Dec. 1 cancellation of its South Stream natural gas pipeline was not surprising. European nations have signaled for years that they intend...

Canada Briefs

12/12/2014

Kinder Morgan to deliver natural gas to Corpus Christi Liquefaction

12/11/2014 Kinder Morgan Inc. (KMI) companies Kinder Morgan Texas Pipeline, Kinder Morgan Tejas Pipeline, and Tennessee Gas Pipeline Co. (TGP) have entered in...

Magnolia LNG lets EPC contract to SK E&C USA

12/03/2014 Magnolia LNG LLC parent-company Liquefied Natural Gas Ltd. agreed to an engineering, procurement, and construction contract with SK E&C USA cov...

Pipeline leak dampens Atlantic LNG production

12/01/2014 Atlantic LNG (ALNG) reported a 35% reduction in LNG production because of insufficient natural gas supply from Trinidad and Tobago’s National Gas C...

Real-time monitoring improves LNG inventory measurement

12/01/2014 Kogas has improved the calculation method for determining stocks at its LNG terminals, changing from a sampling method to a real-time monitoring sy...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected