Oman mulls import of LNG to meet local demand

Published September 1st, 2015 - 06:00 GMT

Oman may start importing liquefied natural gas (LNG) to meet surging domestic energy demand, according to two people with knowledge of the matter, a shift in trade that would make it the fourth Arab country in the Arabian Gulf to buy LNG.

Oman currently exports liquefied gas under long-term contracts to Spain and several Asian countries including Japan and South Korea. It’s now studying options to import LNG as well, to help generate power and for other uses, said the two people, who asked not to be identified because the plan isn’t public. Potential imports would arrive at the port of Sohar. Oman’s Ministry of Oil and Gas didn’t respond to calls for comment.

LNG trade is expanding in the Middle East due to the growing regional use of electricity and the lack of cross-border pipelines for transporting natural gas. Combined imports of LNG by Kuwait and the United Arab Emirates increased 47 per cent in 2014 from the previous year, according to the International Group of Liquefied Natural Gas Importers. Bahrain is building a receiving terminal for the fuel, while Jordan, Egypt, Morocco and Pakistan also plan to buy LNG.

Oman’s possible shift to importing the fuel follows years of rising local gas consumption and shrinking exports of LNG. Spare production capacity at Oman LNG LLC, which operates the country’s facilities for liquefying gas for export, last year reached its highest level since 2006, according to the company’s annual reports. Oman produced 7.95mn tonnes of the fuel in 2014 from plants with an annual capacity of 10.4mn metric tonnes, Oman LNG said in its latest annual report. Natural gas consumption in Oman jumped to 774bn ft3 in 2013 from 520bn ft3 in 2009, according to the US Energy Information Administration.

LNG imports would supplement Oman’s current supply of natural gas by pipeline from Qatar. Oman also hopes to receive gas from Iran through a separate pipeline that has yet to be built. Oman and Iran are discussing a route for this link, H E Mohammed al Rumhy, Oman’s Oil Minister, said on April 14, though the two countries are yet to agree on a price for the gas.


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