Oman LNG and BP Singapore Pte Ltd have announced the signing of a major Sales and Purchase Agreement (SPA) for the supply of LNG to BP Singapore. The announcement was made by Harib al Kitani, Oman LNG’s Chief Executive Officer, and Jonathan Shepard, Chief Operating Officer of BP LNG, under the auspices of Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas and Chairman of Oman LNG. The event took place in Muscat and was attended by high officials and senior executives from the Oil and Gas industry in Oman.
The agreement is buoyed by the existing robust partnership between Oman LNG and BP. The SPA, a Free-on-Board (FOB) contract starting January 2018, will span over a period of seven years lifting 1.1 million tonnes per annum (mtpa), which is equivalent to approximately 18 LNG cargoes annually. It will be a significant boost to the global LNG market where Oman LNG currently contributes a significant amount. “This new agreement will not only unlock additional reserves but will also sustain our LNG business and expand our LNG business. Oman will continue to be a global preferred destination for sourcing clean energy,” said Dr Al Rumhy.
He continued, “The revenues from this transaction will benefit Oman’s national economy and boost our GDP, will also boost efforts towards In-Country Value and Corporate Social Responsibility, all of which are significant drivers to the socio-economic fabric of the Sultanate.” This agreement is strengthened by the reputation and credibility of Oman LNG as a reliable and trusted supplier, coupled with the effective management of all the business processes within Oman LNG, to produce clean energy which is delivered to customers around the world safely and reliably. Furthermore, the LNG plant at Qalhat, in Sur, has the capacity to receive and process additional volumes as it has recently been operating with some spare capacity.
Oman’s liquefied natural gas industry was born out of the vision of His Majesty Sultan Qaboos 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 His Majesty’s 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.
The vision realised through liquefied natural gas has now grown to be the largest income earner for the Sultanate, after oil revenues. Beyond its direct contribution to revenue, the country’s two LNG companies have been pivotal to social development, executing a myriad of social investment initiatives that has triggered job creation and entrepreneurship, spread quality education and healthcare, encouraged women’s development and supported tourism, among others.
“This agreement is a game changer for Oman and Oman LNG where it will provide benefits for the Sultanate through the export of new volumes of feed gas to customers in need of reliable, safe, clean energy. Another win is that the agreement will enable the plant to operate at full capacity and thus create more value and utilising the asset at maximum capacity. From the returns generated, Oman LNG can further invest in social projects and in-country value opportunities enhancing the society of Oman at large”, said Harib al Kitani, Oman LNG’s Chief Executive Officer. “Our aim is to serve the community and contribute to all segments of society through the exports of LNG”.
Alan Haywood, Chief Executive Officer of BP Integrated Supply and Trading said, “BP is pleased to expand its longstanding relationship with Oman LNG through the conclusion of this LNG sale and purchase agreement. Following the commencement of production from the Khazzan gas field, this development deepens BP’s commitment to Oman and strengthens our support for the Sultanate’s gas sector.”
The global liquefied natural gas market is expected to develop much faster than the pipeline gas trade, largely due to the flexible nature of liquefied natural gas and its accessibility for countries. As the global energy industry turns to renewables, liquefied natural gas is perfectly positioned to provide solutions for the mid to long term.