August 17, 2023 [N Business]- Oman LNG has signed an agreement with Securing Energy for Europe (SEFE) to supply 400,000 tonnes of liquefied natural gas a year, starting from 2026.
The agreement with the German company is based on a four-year contract, Oman News Agency reported on Monday.
“The term-sheet signing with SEFE marks another milestone. Going further, the agreement leverages our constant efforts to add value to Oman’s economy through growth and collaborations,” said Mahmoud Al Balushi, chief commercial officer of Oman LNG.
Competition for LNG has increased since Russia’s invasion of Ukraine last year, with Europe importing record volumes of the supercooled fuel to replace Moscow’s gas supplies.
Global LNG trade hit a high of $450 billion in 2022 amid a surge in European demand, the International Energy Agency said.
Despite a rise in demand, LNG supply grew by only 5.5 per cent last year, mostly due to maintenance at large export terminals and the closure of Freeport LNG’s Texas-based plant – one of the world’s largest export centres of the fuel – after an explosion.
EU gas storage sites could reach full capacity by the middle of September, the IEA said in a report last month.
However, a cold winter and a halt in Russian gas supplies could lead to market tension, the state news agency said, adding “fierce” competition for gas exports may arise due to colder weather in North-East Asia and stronger-than-expected economic growth in China.
The deal between SEFE and Oman LNG marks “a significant milestone for both entities”, said Egbert Laege, chief executive of SEFE.
Oman’s LNG production surged 4 per cent to a record 10.6 million tonnes in 2021.
Oman LNG is 51 per cent owned by the state. Other shareholders are Shell Gas with a 30 per cent stake, TotalEnergies, Korea LNG, Mitsubishi Corporation, Mitsui and Company, Partex Corporation Oman and Itochu.
Last year, QatarEnergy signed two sales and purchase agreements with ConocoPhillips to deliver up to two million tonnes per annum of LNG to Germany.
A ConocoPhillips unit will buy the agreed quantities to be delivered to the German LNG terminal, which is currently under development in Brunsbuttel, with deliveries expected to start in 2026.
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