oil and gas

Oman signs agreements with TotalEnergies for gas projects 22 Dec 2021

December 23, 2021

Muscat – Oman’s Ministry of Energy and Minerals has signed three agreements with TotalEnergies for the development of low-carbon natural gas projects in the sultanate, the French energy giant announced on Tuesday.

The first agreement is for the establishment of Marsa LNG, an integrated joint venture company between TotalEnergies (80 per cent stake) and OQ (20 per cent stake).

Marsa LNG will produce natural gas from Oman’s Block 10, with a view to subsequently develop a low-carbon LNG plant in Sohar, powered by solar electricity, for the production of LNG for bunker fuel, TotalEnergies said in a statement.

The second agreement is a concession agreement for Block 10, to develop and produce natural gas from this block, the company said.

Marsa LNG will hold a 33.19 per cent interest in Block 10, together with its partners OQ and Shell Integrated Gas Oman BV (operator). TotalEnergies said its production from Block 10 is expected to reach approximately 24,000 barrels of oil equivalent per day in 2023.

The third agreement between the Ministry of Energy and Minerals and TotalEnergies is a gas sales agreement, under which Marsa LNG will sell natural gas from Block 10 to the government of Oman, for a duration of 18 years or until the start-up of Marsa LNG plant.

“We are pleased to sign these agreements with the Sultanate of Oman and further develop our activities in the country while contributing to develop its energy sector in a more sustainable manner,” said Laurent Vivier, senior vice president – Middle East and North Africa, exploration and production, at TotalEnergies.

The Ministry of Energy and Minerals on Tuesday also reached an agreement with Shell for the company to produce natural gas from Block 10. The ministry signed the concession agreement with Shell Integrated Gas Oman BV, a subsidiary of Royal Dutch Shell, and its partners OQ and Marsa LNG, to develop and produce natural gas from Block 10 of the Saih Rawl gas field.

The concession agreement establishes Shell as the operator of Block 10, holding a 53.45 per cent working interest, with OQ and Marsa LNG holding 13.36 per cent and 33.19 per cent, respectively.

In Oman, TotalEnergies’ production was 39,000 barrels of oil equivalent per day in 2020. The company produces oil in Block 6 (with 4 per cent interest), as well as LNG through its participation in the Oman LNG/Qalhat LNG liquefaction complex with an overall capacity of 10.5mn tonnes per year.

In 2020, TotalEnergies also signed an exploration and production sharing agreement for Block 12 with the Ministry of Energy and Minerals. TotalEnergies is operator of Block 12 covering 10,000 sqkm with a 80 per cent share alongside its partner PTTEP of Thailand (20 per cent interest).

TotalEnergies is the world’s second largest privately owned LNG player, with a global portfolio of nearly 50mn tonnes per annum by 2025 and a global market share of around 10 per cent. The company benefits from strong and diversified positions throughout the LNG value chain: gas production and liquefaction, LNG transportation and trading, and contribution to the development of the LNG industry for maritime transport.

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