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Oman Continues to Advance LNG Supply Agreements in Latest Deal With Botas
Oman has agreed to provide Turkey’s Botas with LNG beginning in 2025, continuing a streak of supply agreements that began last year as the nation looks to increase output of the super-chilled fuel.
Oman LNG LLC would supply 1 million metric tons/year (mmty) to state-owned Botas over a 10-year term from its Qalhat liquefaction facility near Sur, where it operates three trains with a design capacity of 11.4 mmty.
The deal comes amid a broader push in Oman to work with a wide variety of partners to further develop the nation’s energy sector and boost LNG production.
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Lifted by strong global natural gas demand last year, Oman exported 11.58 million tons (Mt) of LNG, compared to 10.28 Mt in 2021, according to Kpler data. Most of the country’s export volumes go to Asia.
Botas said the supply deal would help secure energy supplies and limit price exposure on the spot market. Turkey, which operates four LNG import terminals onshore and offshore in addition to an extensive pipeline network, is also working to develop a regional gas hub to boost exports.
Oman has joined LNG producers in the United States and Qatar that have seen a flurry of contracting activity with buyers looking to lock in long-term supplies and shield themselves from volatility on the spot market.
Since late last year, Oman has signed long-term agreements with three Japanese companies, including Itochu Corp. Jera Co. Inc. and Mitsui & Co. to deliver 2.35 mmty beginning in 2025.
Oman is also hoping to renegotiate contracts that begin expiring in 2025 and was able to partly fulfill that goal with Itochu, Japan’s largest trading and manufacturing conglomerates.
So far this year, Oman has also signed agreements to supply TotalEnergies SE and Thailand’s PTT Global LNG Co. with 0.8 mmty of LNG each. Prior to that, it reached an agreement with an affiliate of Shell plc to provide 0.8 mmty. All of those deals covered terms of 10 years.
The Middle East is expected to become the world’s second largest natural gas producer by 2050, according to a report released this week by the Gas Exporting Countries Forum. In its seventh annual global gas outlook, GECF said it expects the region to supply 22% of all the world’s gas by then, compared to current levels of 17%.
Ultimately, natural gas output in the Middle East is expected to jump by 520 billion cubic meters (18.3 Tcf) to 1.2 trillion cubic meters (42.4 Tcf) by 2050.
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