France’s TotalEnergies has become the latest energy company to tap into Oman’s bountiful liquified natural gas (LNG) supplies, after Turkey’s state gas grid operator and Shell signed similar deals with a company from the sultanate last week.
LNG is a major source of income for Oman, which after Qatar is the second-largest exporter of the commodity in the Middle East.
A TotalEnergies statement Monday said that on April 21, Patrick Pouyanne, chairman and CEO of TotalEnergies, met with Omani Sultan Haitham bin Tariq Al Said and Minister of Energy and Minerals Salim bin Nasser Al Aufi.
During the visit, Oman LNG and TotalEnergies, one of its shareholders, signed a sale and purchase agreement to supply 800,000 metric tons (mt) per year of LNG for 10 years from 2025, the European company said in a statement. TotalEnergies owns 5.54% of Oman LNG.
Oman LNG is majority owned by the Omani government (51%), with Shell as a 30% shareholder. The other shareholders are Korea LNG (5%), PTTEP (2%), Mitsubishi (2.77%), Mitsui (2.77%) and Itochu (0.9%).
TotalEnergies and OQ Alternative Energy, an Omani renewable energy company, also confirmed in the statement that they are at an advanced stage of talks to jointly develop a portfolio of up to 800 megawatts, including a 300 megawatt peak solar project that will supply the Marsa LNG project.
The Marsa LNG project will be run by a joint venture called Marsa Liquified Natural Gas. It is 80% owned by TotalEnergies and 20% owned by OQ Alternative Energy. The project includes upstream gas production, downstream gas liquefaction and renewable power generation, to allow the plant to be 100% electrically driven and supplied with solar power.
TotalEnergies called the Marsa project the first LNG bunkering hub in the Middle East. It includes 150 million cubic feet of natural gas per day, coming from the joint venture's 33.19% stake in the Mabrouk North-East field on onshore Block 10, which will provide feedstock for the Marsa LNG plant that will be built in the northern port of Sohar.
The announcement comes off the back of several deals announced by Oman LNG. Last week, Oman LNG signed an agreement with Turkey’s national grid gas operator Botas to supply 1 million tons per annum (mtpa) of LNG for 10 years from 2025. It also signed a decadelong agreement with Shell to supply 1.6 mtpa from 2025.
According to a report last July by Oman’s Ministry of Energy and Minerals, the country in 2022 was sitting on reserves of at least 24 trillion cubic feet of LNG, a 7% increase compared to the corresponding period of 2021, as more of the energy supply is discovered.
