Qalhat LNGís First Cargo Leaves Oman

Source: Times of Oman 12/13/2005, Location: Middle East

The first commercial LNG cargo from Qalhat LNG SAOC (QLNG) left the Qalhat LNG Complex export terminal yesterday. 135,000 cubic metres of LNG is being transported by the Omani LNG carrier Sohar to Spain. Qalhat LNG was incorporated in March 2003 to form the third LNG train in Oman. The train is located at Qalhat in Sur, nearly 350km from Muscat. Qalhat LNG SAOC is a closed joint-stock company owned by the government of Oman (55.84 per cent), Oman LNG (36.8 per cent) and Union Fenosa Gas (7.36 per cent).

The Qalhat LNG train is located adjacent to the two identical trains of Oman LNG at Qalhat, and the two companies will share certain common facilities. Oman LNG, on behalf of Qalhat LNG, will operate the new train along with the existing facilities as an integrated plant while optimising operation and efficiency of the complex. The Qalhat LNG train, worth around $700 million, has a capacity to produce 3.7 MMtpa of LNG. Qalhat LNG has a specific EPC cost of only $147 per tonne of LNG, which is amongst the lowest in the world. With the new plant going on stream, the countryís LNG production will increase from the present 6.6 MMtpa to more than 10 MMtpa.

Qalhat LNG has signed three long-term sale and purchase agreements (SPAs) for a total contracted volume of approximately 3.3 MMtpa. The agreements to supply LNG include a 20-year SPA with Spainís Union Fenosa Gas (1.65 MMtpa), a 17-year SPA with Japanís Osaka Gas (0.85 MMtpa) and a 15-year plus SPA with Mitsubishi Japan (0.8 MMtpa).

Al Kitani added that Qalhat LNG train has also entered into a 20-year transportation agreement with the government owned Oman Shipping Company (OSC) for chartering two LNG vessels to deliver LNG to Union Fenosa Gas in Spain.

Meanwhile, Mitsubishi has chartered another OSC vessel to lift their LNG shipment from Qalhat LNG starting 2006. A fourth vessel will be used to ship LNG to Osaka Gas from 2009. With these developments, Qalhat LNG and OSC are closely working together to fulfil the aspirations of the government of Oman to build an indigenous and self-sufficient LNG shipping industry.

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