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BP and Oman sign seven-year LNG supply deal

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Reuters are reporting that BP’s Singapore-based trading unit has signed a deal to buy 1.1 million tpy of LNG for seven years from Oman LNG, after BP helped push up Omani gas production.

The signing on 21 January in Muscat was attended by Oman’s Minister of Oil and Gas Al Rumhy and BP LNG Chief Operating Officer Jonathan Shepard.

First production from BP’s giant Khazzan gas field in September is reversing a decade-long decline in output from Oman’s 10.4 million tpy capacity LNG plant.

Oman LNG exported 8.2 million tpy last year, compared with 8 million tpy in 2016, 7.6 million tpy in 2015 and 7.4 million tpy in 2014.

Falling LNG exports stem from a government policy of prioritising gas for domestic electricity and industrial demand.

Khazzan’s estimated 10.5 trillion ft3 in recoverable gas resources offers a new source of feedstock for Oman LNG.

The free-on-board terms of the deal allow BP to ship the cargoes anywhere without destination restrictions.

Oman LNG is 51% owned by Oman, with Royal Dutch Shell accounting for 30%, Total 5.54%, Mitsubishi 2.77%, Korea LNG 5%, Partex Corp 2%, Mitsui 2.77% and Itochu 0.92%.

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