Oman Inks First-Ever LNG Deal with Germany

It is all about medium-term LNG contracts (with four charts)

EOA’s Main Takway

• European countries do not want to sign long-term contracts while their dependence on the spot market is risky. The solution in medium-term contracts. Will this become a new trend?

• It remains to be seen how widespread this type of contract will be. Oman LNG has always been a special case.

On August 14, Oman LNG signed a binding agreement to supply 400,000 tons of Liquefied Natural Gas (LNG) per year to the Berlin-based Securing Energy for Europe (SEFE), with deliveries expected to start in 2026. The four-year contract is the first-ever deal between Oman and Germany, marking a new milestone for the Gulf state as it seeks to diversify its customer base by adding new markets for its LNG sales.  

The newly signed agreement with SEFE increased the number of contracts Oman LNG has signed since last December to nine, with an aggregated volume of 7.15 million tons per annum (mtpa).

Historically, most of Oman’s LNG has been sold under long-term and oil-indexed LNG contracts with Korean and Japanese firms, and since the inception of the Oman LNG plant in 2000. These legacy contracts are set to expire in the upcoming months, freeing a significant volume of LNG produced from the 10.4 mtpa Oman LNG plant. The most notable legacy contracts include the 4.1 mtpa contract with South Korea’s KOGAS, the 0.7 mtpa contract with Japan’s Osaka Gas, as well as the 0.7 mtpa contract with Ituchu Corporation, which will all expire by the end of 2024. Oman LNG also has a 1.1 mtpa LNG contract with BP Singapore that is expected to expire by December 2025.

New Agreements with Asian and European Buyers