Oman LNG Signs 2 Binding Term-sheet Agreements with Oman Shell and OQ Trading

Oman LNG has announced the signing of 2 binding term sheet agreements to supply 0.8 million metric tonnes per annum of LNG to Oman Shell and 0.75 million metric tonnes per annum of LNG to OQ Trading (OQT). Such step comes to leverage the strategic partnership between Oman LNG and other energy firms.

Based on these agreements, Oman Shell will receive 0.8 million metric tonnes per annum of LNG from the company for 10 years starting from 2025; whereas OQT will receive 0.75 million metric tonnes per annum of LNG under a 4-year deal beginning in 2026.

Both agreements form significant steps in the history of Oman LNG and a major milestone, where they mark the completion of delivering 10.4 mtpa per annum 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 kick off of this campaign.

With the previously agreed term sheet with Oman Shell for the offtake of another 0.8 million metric tonnes per year in January 2023, this additional term sheet makes Oman Shell the biggest off-taker from Oman LNG beyond 2024.  Additionally, it comes as a promising step for further collaborations with Oman’s primary energy trading arm, OQT.

Under the presence of HE Eng. Salim Al Aufi, Minister of Energy and Minerals, the agreements were signed by Hamed Al Naamany, CEO of Oman LNG, Walid Hadi, Senior Vice President the Country Chairman of Oman Shell, and Wail Al Jamali, CEO of OQT, at Oman LNG Head Office in Muscat.

Speaking after the signing ceremony, Hamed Al Naamany, CEO of Oman LNG, said ” 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”.

The agreements are strengthened by the reputation and credibility of Oman LNG as a reliable and trusted LNG supplier around the globe, coupled with the effective management of business processes to produce clean energy delivered to customers around the world safely and reliably.

From his end, Walid Hadi, Senior Vice President the Country Chairman of Oman Shell said: “Shell has been a proud shareholder in Oman LNG with a 30 percent stake since its inception. 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, added: “As the international energy and commodity trading vehicle of the Government of Oman, we are delighted to add this strategic off-take to our portfolio. The execution of this term sheet represents the first long-term agreement between our two organisations following many years of cooperation. We are committed to developing a strong, sustainable relationship for the long-term benefit of our respective shareholders and the Sultanate of Oman.”

Oman’s liquefied natural gas industry was born out of the vision of the late Sultan Qaboos bin Said to diversify the country’s economy and has attracted high revenue by harnessing natural gas resources for export as liquefied natural gas. The country produced its first shipment of liquefied natural gas in 2000 after the first of an initial two-train plant began operations under Oman LNG, established by Royal Decree in 1994. With a third train under Qalhat LNG, liquefied natural gas has played an even greater role in contributing to the national economy as the two companies, that integrated in 2013 and now operate as Oman LNG, have worked intensely with outstanding success to drive their organisations forward.