Oman LNG signed two binding term-sheet agreements to supply Liquified Natural Gas (LNG) to Shell International Trading Middle East FZE and to OQ Trading. The signing ceremony took place in Muscat.
Based on these agreements, Shell International Trading Middle East FZE would receive 0.8 million metric tonnes per annum (mtpa) of LNG from Oman LNG for 10 years starting from 2025 whereas OQ Trading would receive 0.75 mtpa of LNG under a 4-year deal beginning in 2026.
With the previously agreed term sheet with Shell International Trading Middle East FZE for the offtake of another 0.8mtpa 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.
This step comes to leverage the strategic partnership between Oman LNG and other energy firms. Oman has marked the completion of delivering 10.4 mtpa 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.
“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,” said Hamed Al Naamany, CEO of Oman LNG following the signing ceremony which was attended by Salim bin Nasser al Aufi, the Omani Minister of Energy and Minerals.
On his part, Walid Hadi, Senior Vice President and Country Chair of Oman Shell expressed his pleasure in becoming Oman LNG’s largest purchaser and privet shareholder. “Shell is proud of the role it has played in Oman LNG to date, as a shareholder and a technical advisor since its inception.” He said, noting “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 pointed out that this deal would represent the first long-term agreement between both organizations, with OQT being the international energy and commodity trading vehicle of the government of Oman. “The execution of this term sheet represents the first long-term agreement between our two organizations 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,” he said.
It is worth noting that Oman LNG, earlier this month, signed an agreement to supply one mtpa of liquefied natural gas to Germany’s Secure Energy for Europe (SEFE) in what has been referred to as the first LNG agreement between the two nations.
