Dubai — Oman, the biggest oil producer in the Middle East outside OPEC, plans to boost its LNG production by around 10% by 2021 through debottlenecking, an Oman LNG official told S&P Global Platts.
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"The debottlenecking project starts this year and will be in full swing by 2021," said Mohammed al-Naseeb, chief marketing officer at Oman LNG. Current production is 10.5 million mt/year, and will reach 11.5 million mt/year after the expansion, he said.
The Omani government is the biggest shareholder in Oman LNG at 51%, followed by Shell with a 30% stake, Total with 5.54% and Korea LNG with 5%. Other shareholders include Mitsubishi Corporation, Partex and Mitsui & Co.
Around 40% of Oman LNG's output goes to Japan and the biggest buyer is South Korea's Kogas, which imports 4.06 million mt/year. In 2018, Oman LNG agreed to sell 1.1 million mt/year to BP over seven years.
Oman expects to find more natural gas from reservoirs northeast of the sultanate in the area where the giant Mabrouk field is estimated to hold more than four trillion cubic feet of gas and 112 million barrels of condensate, the country's oil and gas minister Mohammed al-Rumhi told S&P Global Platts last week.
Oman, which currently produces around 3 billion cubic feet of gas per day, is increasing exploration and undertaking multi-billion dollar projects to monetize gas from the field that was discovered in 2018.
State-run Oman Oil Co., Total and Shell are partnering in the upstream development of Mabrouk while Shell and Total are separately working on a gas-to-liquids (GTL) plant to be developed by Shell and an LNG bunkering facility to be developed by Total.
The sultanate is also developing its giant Khazzan gas field with the help of BP, which is expected to boost production from the current 1 billion cubic feet per day to 1.5 billion cubic feet per day by 2021.
With regards to Oman LNG's customers, the majority of contracts are long-term and will expire in 2025 when the concession ends.
"The majority of contracts are based on Brent, but we have a mixture. We negotiate contracts for what would be the highest returns," said Naseeb.
"Our main presence in the spot market is through the optimization of certain contracts" and averages about 10% of total sales, he said.
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