Strong local demand for Oman LNG

The Chief Executive of Oman LNG has said that strong local demand for gas means it is unlikely that the company will have any additional cargoes of liquefied natural gas for sale for years.

Oman LNG is 51 percent owned by the government, 30 percent owned by Royal Dutch Shell, and France's Total and Japan's Mitsui also have stakes.

Oman lacks the gas needed to meet both rapidly rising domestic demand and to fill the LNG facility, which therefore produces below capacity, Oman LNG's chief executive Brian Buckley told reporters on the sidelines of an energy event.

Oman produces only the amount it needs to meet long term supply contracts, which is eight million tonnes per year (tpy). This figure is three million tonnes below its capacity to ship gas chilled to liquid form for export on specially designed tankers.

With Oman prioritising meeting domestic demand from power plants, industry and the oil industry, there would be no cargoes available for trade in the physical, or spot market, for some time, Arabian Business states.

Buckley said: "For the next two to five years, spot trade volumes won't be available."

Pipeline imports

Oman imports through a pipeline via the UAE from Qatar. Despite this and rising domestic demand from power plants and a growing economy, Oman would meet its long term contractual commitments to export gas in the form of LNG, he said.

Domestic demand for gas throughout the Gulf region is growing at around 10 percent each year, Buckley said. The government needed the gas to supply the industries it wants to expand to create employment for a growing population, he said.

Oman produces LNG from three trains, or production facilities.

 

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