Eric Watkins
Senior Correspondent
LOS ANGELES, Mar. 31 -- Oman will fund a third LNG train for Qalhat LNG SAOC through a $688-million loan from 13 international banks.
The new train, which will produce 3.7 million tonnes/year (tpy) of LNG, is under construction at Qalhat near Sur on Oman's northeastern coast, adjacent to the existing Oman LNG plant.
Officials said Qalhat LNG and Oman LNG will operate as an integrated complex in order to generate economies of scale, improved efficiency, and lower production costs.
Sheikh Alfadhel bin Mohammed Al Harthy, chairman of Qalhat LNG, said the new plant, which is about 90% complete, would begin start-up operations before yearend, with commercial production under way by January 2006.
Qalhat LNG has signed three long-term agreements for a total of 3.3 million tpy of LNG.
The agreements include a 20-year agreement with Spain's Union Fenosa Gas for 1.65 million tpy, a 17-year deal with Japan's Osaka Gas Co. Ltd. for 850,000 tpy, and a 15-year or longer contract with Mitsubishi of Japan for 800,000 tpy.
Qalhat LNG has also signed shipping agreements with Oman Shipping Co. SAOC (OSC).
OSC recently signed an agreement to finance two 145,000 cu m LNG carriers and hopes to sign another financial agreement for two more, now under construction in Japan and South Korea.
Two of the vessels are expected to join OSC in the fourth quarter and the other two in second quarter 2006, bringing the fleet total to six carriers.
Qalhat LNG stakeholders are Oman 56%, Union Fenosa 36.8%, and Oman LNG 7.36%.
