Oman LNG cargo deliveries top 2,400-mark in 17 years

Oman LNG, which operates a three-train gas liquefaction plant at Qalhat in Sur, has so far delivered in excess of 2,400 LNG cargoes to markets around the world over its 17-year operational life – a success story that the majority government-owned company plans to sustain through the implementation of a major plant rejuvenation programme.
According to Harib al Kitani (pictured), Chief Executive Officer, LNG consignments from the Qalhat complex have been shipped to markets as far afield as Puerto Rico in the United States, one of 15 countries that have lifted Omani LNG since shipments began in 2000.
The CEO attributed the company’s continuing success primarily to its ability to stay competitive in a constantly changing energy landscape, as well its long-standing commitment to delivering LNG safely, efficiently and reliably.
Al Kitani made the comments in a keynote address to a large gathering of gas industry executives taking part in the GCC and Europe chapters of the Gas Processors Association (GPA). The three-day event began at Shangri-La’s Barr Al Jissah Resort yesterday under the auspices of Salim bin Nasser al Aufi, Under-Secretary of the Ministry of Oil & Gas and Chairman of Oman LNG.
In his address, the CEO outlined efforts by the company to suitably reconfigure and upgrade its operations in order to receive gas streams from the newly launched BP Khazzan field in Block 61. Upgrades to key systems at the Qalhat complex, as well as the reconfiguration of its gas fractionation columns, have enabled the plant to receive a different mix of gas via the grid, he said.
“With changes in the gas mix we are experiencing through the start-up of BP Khazzan gas, Oman LNG has demonstrated preparedness and agility in upgrading its operations to achieve higher utilisation, while also keeping efficiency in mind,” Al Kitani said.
Part of BP Khazzan’s gas output is now being channelled to Oman LNG to plug a long-standing shortfall in supply that had left the company operating at only around 80 per cent of its 10.4 million tons per annum (mtpa) nameplate capacity.
Significantly, Oman LNG has also embarked on a major “life extension” project designed to add more years to the operational life of its plant, said the CEO. Through a refurbishment and upgrade of key pieces of equipment and systems, the company aims to boost the plant’s operational life by a further 10 years, covering the 2025 – 2034 timeframe, he said.
Earlier, Al Kitani urged gas processors to work in concert to stave off an array of challenges that threaten to imperil the sustainability and growth of the global LNG business.
The LNG market itself has undergone a dramatic transformation, primarily for the worse, he noted. In the past, the market comprised, on the one hand, a small handful of LNG sellers, who were actually producers themselves, and on the other, a small handful of LNG buyers, who were actually end-users themselves. Today, however, the market is “amazingly fluid, crowded and almost commoditised, for the first time,” he lamented.
Of late, the market has attracted all manner of traders, middlemen, distributors, wholesalers, aggregators, and so on, he said. And unlike stable and long-term relationships that characterised contracts between suppliers and buyers in the past, today, “short and medium term, flexible destinations, hit and run prices are the preferred relationships,” he noted.
Also posing a challenge is the upsurge in LNG spot cargoes, said Al Kitani. Last year, an unprecedented 700 cargoes — representing around 20 per cent of all LNG deliveries worldwide — fell in the category of spot cargoes. This year, the figure is projected to balloon to over 1,000, he said.