New deals bolster Oman LNG’s bid to secure license extension

New deals bolster Oman LNG’s bid to secure license extension

Firm contracts signed this week by Oman LNG to supply liquefied natural gas (LNG) to three Japanese companies, represent a major boost for the majority Omani state-owned energy company’s ambition to operate beyond its current concession, which is due to expire in 2024.

Japanese trading conglomerates Mitsui & Co and Itochu Corp, along with power company JERA, signed long-term pacts for the supply of a total of 2.35 million tonnes per annum (mtpa) of LNG from the Sultanate of Oman.

Supply timeframes span 5 to 10 years starting from 2025, effectively keeping Oman LNG in operation well into the future – a development that necessitates an extension of the company’s current concession agreement with the Omani government. Inherent in that extension is a commitment by the government, represented by the Ministry of Energy and Minerals, to ensure continued supplies of natural gas as feedstock for the production of LNG.

According to market experts, this week’s supply agreements vindicate recent multi-million dollar investments by Oman LNG to prep itself for what it has dubbed a ‘Life Extension’ programme encompassing a portfolio of capacity restoration, debottlenecking and rejuvenation initiatives.

That programme began in 2017 with a ‘Capacity Restoration’ project that helped restore plant capacity to its