Oman LNG

Oman LNG is the Omani company responsible for the liquefaction, marketing and export of liquefied natural gas from the Qalhat complex near Sur in South Sharqiyah Governorate. The company was established in 1994 by royal decree after the discovery of substantial non-associated natural-gas resources in central Oman during the late 1980s and early 1990s. Its creation separated the downstream LNG business from the upstream gas system, which was developed and operated by Petroleum Development Oman. The project was built to turn Oman's domestic gas resources into an export industry. Oman LNG signed its first major long-term sales agreement with Korea Gas Corporation in 1996, followed by supply arrangements with Osaka Gas and Dabhol Power Company. Construction of the Qalhat facilities began in November 1996 under an engineering, procurement and construction contract involving Chiyoda and Foster Wheeler. The first train began production in February 2000, the first LNG cargo was exported in April 2000, and the facility was formally inaugurated later that year. The first shipment to South Korea followed in April 2001. The original complex comprised two liquefaction trains, each designed to produce approximately 3.3 million tonnes of LNG annually. A third train was developed through Qalhat LNG, adding approximately 3.7 million tonnes per year. That train was completed in late 2005, inaugurated in March 2006 and began commercial shipments in early 2006. Oman LNG and Qalhat LNG merged in September 2013, creating a single operating entity while retaining the Oman LNG name. The combined nameplate capacity is generally reported at approximately 10.3 to 10.4 million tonnes per year. Oman LNG's gas supply is transported from central Omani fields to the coastal plant through a long-distance pipeline system operated by Petroleum Development Oman. Reported supply sources include the Barik, Saih Nihayda and Saih Rawl fields. The plant uses Air Products AP-C3MR liquefaction technology and includes two LNG storage tanks with combined storage capacity of approximately 240,000 cubic metres. LNG is loaded for delivery to overseas customers under a mixture of long-term and shorter-term sales agreements. During much of the 2000s and early 2010s, rising Omani domestic demand reduced the gas available for export. Train utilization consequently remained below design levels, and exports during 2010-2012 were reported at about eight million tonnes annually, leaving part of the plant's capacity unused. A short operational interruption also followed Cyclone Phet in 2010, although the plant and its employees were reported to have remained unharmed. The situation improved when BP's Khazzan gas project increased upstream supply. In 2017, Oman LNG reported that all three trains could operate at full capacity for the first time after a prolonged period of lower utilization. The company has also pursued commercial, technical and environmental partnerships. It entered a long-term service agreement with GE Oil & Gas for its gas turbines, worked with Petroleum Development Oman on technical and commercial cooperation, and signed environmental outreach arrangements with the Environment Society of Oman. Its customer base has included buyers in South Korea, Japan, India and Europe, as well as international energy companies. Oman LNG is privately held, but the Omani government remains the controlling shareholder. As a national gas-export platform, the company links domestic upstream production with international LNG markets and remains an important part of Oman's energy infrastructure.

Oman's LNG industry emerged from the discovery of large non-associated gas fields in central Oman between 1989 and 1991. In January 1992, the Omani government accepted a preliminary feasibility study prepared by Royal Dutch Shell and agreed to pursue an LNG project. A shareholders' agreement was signed in June 1993, allocating a controlling interest to the Omani government and minority interests to Shell, Total, Korea Gas Corporation, Partex, Mitsubishi, Mitsui and Itochu. Oman LNG was established by royal decree in February 1994 and registered as an Omani company in July of that year. The company was designed to manage the downstream portion of the national gas chain: liquefaction, LNG transportation and sales. Petroleum Development Oman retained responsibility for upstream activities, including field development, gas processing and pipeline delivery. Qalhat, near the coastal city of Sur, was selected as the plant location in 1995. The project secured its first major sales and purchase agreement with Korea Gas Corporation in October 1996, covering approximately 4.1 million tonnes per year for 25 years. Construction began in November 1996 under an EPC arrangement involving Chiyoda and Foster Wheeler, alongside a government gas-supply agreement. The first train was ready for startup in December 1999 and entered production in February 2000. Oman LNG exported its first cargo in April 2000 and held the formal inauguration in October. The first shipment to South Korea was made in April 2001. Long-term customer agreements with Osaka Gas and Dabhol Power Company were added before the first plant was fully commercialized, while shorter-term transactions were later conducted with companies including Total, Coral Energy and Enagás. A bank consortium provided a reported US$1.3 billion refinancing facility in January 2002. The next major expansion came through Qalhat LNG. A third train with approximately 3.7 million tonnes per year of capacity began construction in 2004. It was completed in late 2005, inaugurated in March 2006 and began initial shipments in early 2006. The additional train brought total nameplate capacity to roughly 10.3 to 10.4 million tonnes per year. Operational milestones included the shipment of a 500th cargo to Korea Gas Corporation in 2005 and a 1,000th cargo to Osaka Gas in 2009. Oman LNG's performance was constrained for much of the following decade by increasing domestic gas consumption. Industrial development and population growth reduced the supply available for export, resulting in train utilization of about 80 percent in 2008 and 2009 and average exports of approximately eight million tonnes per year between 2010 and 2012. In 2010, Cyclone Phet caused a temporary shutdown, although reference material reports no injury or major damage. The company also had to reschedule a portion of exports in 2015 because of feed-gas shortages. The company pursued reliability, environmental and community initiatives during this period. In 2008 it signed a 16-year service agreement with GE Oil & Gas for twelve gas turbines at the Qalhat complex. Oman LNG received regional corporate-responsibility and environmental-compliance awards in 2008 and 2010. It signed a five-year agreement with the Environment Society of Oman in 2012 to support environmental conservation outreach. In September 2013, Oman LNG and Qalhat LNG merged, with the stated objectives of improving operating effectiveness and lowering costs. A proposed additional source of supply was discussed through an Oman-Iran gas arrangement. Oman and Iran signed a memorandum of understanding in 2013 and subsequently concluded a long-term gas export agreement involving a proposed cross-Gulf pipeline. The planned volumes and infrastructure were intended to support Oman's gas balance, although the reference material does not establish that the full plan was implemented. The arrival of BP's Khazzan gas production in 2017 materially improved feed-gas availability, allowing all three LNG trains to run at full capacity for the first time after years of lower utilization. Oman LNG also entered a three-year technical and commercial cooperation agreement with Petroleum Development Oman in 2017 and signed a seven-year, approximately 1.1-million-tonne-per-year supply agreement with BP Singapore in 2018. The company later reported recognition for voluntary work and, in 2019, 35 million working hours without a lost-time injury.

• 2019

  Safety milestone

  [1]Oman LNGen.wikipedia.org

  The company celebrated 35 million working hours without a lost-time injury.

• 2017

  Full three-train operation

  [1]Oman LNGen.wikipedia.org

  New upstream supply from the Khazzan project enabled all three LNG trains to operate at full capacity.

• 2013

  Merger with Qalhat LNG

  [1]Oman LNGen.wikipedia.org

  Oman LNG and Qalhat LNG merged into a single operating entity.

• 2006

  Third train enters service

  [1]Oman LNGen.wikipedia.org

  The Qalhat LNG third train was inaugurated and began initial commercial shipments, lifting total capacity to approximately 10.3 to 10.4 million tonnes per year.

• 2000

  First LNG production and export

  [1]Oman LNGen.wikipedia.org

  The first train began production in February, the first cargo was exported in April, and the plant was formally inaugurated in October.

• 1996

  Qalhat construction begins

  [1]Oman LNGen.wikipedia.org

  Construction of the LNG plant began at Qalhat near Sur under an EPC contract involving Chiyoda and Foster Wheeler.

• 1994

  Oman LNG is established

  [1]Oman LNGen.wikipedia.org

  The company was created by royal decree and registered as an Omani company later that year.

• 1992

  Government accepts LNG feasibility work

  [1]Oman LNGen.wikipedia.org

  Oman accepted a preliminary LNG feasibility study prepared by Royal Dutch Shell and moved toward establishing an LNG export project.

Oman's national-scale LNG liquefaction and export platform, connecting domestic natural-gas production with international energy buyers.

• Energy commodity · 2000

  Liquefied natural gas

  Oman LNG's principal product is LNG produced by cooling pipeline-quality natural gas to a liquid state for storage and marine transport. The Qalhat complex comprises two original trains of approximately 3.3 million tonnes per year each and a third train of approximately 3.7 million tonnes per year. Cargoes are sold under long-term and shorter-term agreements to utilities, energy companies and other international buyers.

• 2017Technical and commercial cooperation with Petroleum Development Oman

  Oman

  Oman LNG and Petroleum Development Oman agreed to cooperate for three years on technical and commercial matters, including plant modifications and engagement with international companies.

  Outcome. The agreement was intended to improve coordination between upstream gas supply and downstream LNG operations.

  Source
• 2012Environment Society of Oman partnership

  Oman

  Oman LNG entered a five-year agreement with the Environment Society of Oman to support environmental conservation outreach and improve the effectiveness of related activities.

  Outcome. The partnership was presented as a community and environmental-conservation initiative; detailed performance metrics are not provided in the reference material.

  Source

• 2018

  Seven-year supply agreement with BP SingaporeOther

  Background

  Improved feed-gas availability created greater scope for contracted LNG sales.

  Action taken

  Oman LNG agreed to supply BP Singapore approximately 1.1 million tonnes of LNG per year for seven years from January 2018.

  Aftermath

  The agreement added a substantial international offtake commitment to Oman LNG's customer portfolio.

  Source

• 2017

  Operate all three LNG trains at full capacityStrategy

  Background

  Domestic demand and constrained upstream supply had kept utilization below design levels for much of the previous decade.

  Action taken

  Additional feed gas associated with BP's Khazzan project was brought into the Omani gas system, allowing Oman LNG to use all three trains at full capacity.

  Aftermath

  The improved supply position supported higher production and export expectations.

  Source

• 2013

  Merge Oman LNG and Qalhat LNGM&A

  Background

  Oman operated two major LNG entities after the addition of the third train through Qalhat LNG.

  Action taken

  The companies combined into one operating entity while continuing under the Oman LNG name.

  Aftermath

  The merger was intended to increase operational effectiveness and reduce costs, while the combined entity retained approximately 10.3 to 10.4 million tonnes per year of nameplate capacity.

  Source

1. 1Oman LNGen.wikipedia.org
2. 2Oman LNG official websiteomanlng.com