Oman: US$ 688 agreement to finance third gas liquification train

Published April 1st, 2005 - 05:04 GMT

Qalhat LNG signed at Al-Bustan Palace hotel Wednesday an agreement valued US$ 688 million with 13 local and international banks and financing authorities to finance the establishing of the third gas liquefaction train. 


The finance contract was signed by Ahmed bin Abdul-Nabi Macki, Oman's National Economy Minister and Deputy Chairman of the Financial Affairs and Energy Resources Council, Dr. Mohammed bin Hamad al-Rumhi, Oil and Gas Minister, Sheikh Al-Fadhl bin Mohammed al-Harthy, development affairs undersecretary at the National Economy Ministry and chairman of Qalhat LNG Company, Harib bin Abdullah al-Kitani, Executive President of Qalhat LNG company and senior officials of banks and financing authorities.  


According to ONA, the Sultanate owns 55.84% of Qalhat LNG company, while the Oman LNG company owns 36.80% stake in the company and the Spanish Union Venosa 7.36%. 


The natural gas liquefaction complex in the wilayat of Sur currently includes two gas liquefaction trains of the Oman LNG company. 


Macki stressed the importance of the financing agreement, saying the establishing of the train has reached advanced stages.  He noted that in an endeavor to enhance the gas and investment sector, the government has recently concluded agreements to finance the building of LNG transport vessels (Nizwa and Ibri) to join the service besides “Muscat” and “Sohar” ships. He said other agreements will shortly be signed to finance the ships “Salalah” and “Ibra” which are currently being built in Japan and Korea to join the service by mid 2006. 


He said the goals of the future vision of Omani economy 2020 aims to achieve a diversified economy, noting that big strides were made in this direction. He added the economy diversification project established in the country included specialist ports such as the container handling facility in Salalah. Work is underway to establish Sohar port in the Batinah region, the oil refinery, petrochemical, urea and aluminum factories and others, he added.


Sheikh al-Harthy said 90% of the third gas liquefaction train project was achieved and the factory will be ready in November 2005 to start its commercial operations in 2006.  


He noted that Qalhat LNG company has concluded 3 long term LNG sale and purchase agreements for a quantity of 3.3 million metric tonnes of gas annually.


These contracts include a 20 year long  agreement with Union Venosa company to deliver LNG in Spain, a 17 year long agreement with Osaka company to deliver gas on board of ship in Japan and a 15 year long with Mitsubishi to deliver gas on board of ship in Japan and the US. He pointed out that the government will provide Qalhat LNG company’s factory with a maximum of 3.8 trillion cubic feet of natural gas.  


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