Energy Outlook Advisors' Newsletter

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Energy Outlook Advisors' Newsletter
Energy Outlook Advisors' Newsletter
Oman LNG Remarkable Success: New Term-Contracts Amid Potential Capacity Boost

Oman LNG Remarkable Success: New Term-Contracts Amid Potential Capacity Boost

Will LNG expansion replace some Russian gas in Europe?

Anas Alhajji's avatar
Anas Alhajji
Jun 20, 2023
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Energy Outlook Advisors' Newsletter
Energy Outlook Advisors' Newsletter
Oman LNG Remarkable Success: New Term-Contracts Amid Potential Capacity Boost
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In The News:

Oman inks 10-year deal to export LNG to Bangladesh

Oman’s Energy Market: A Regional Comparison

Global trade in LNG increased by 5% in 2022

Oman’s economic policies lauded by top US institute

Record LNG Exports

Oman’s monthly LNG exports stood at 0.9 to 1 million tons (mt) throughout most of last year, and they were divided between LNG-term obligations and spot cargoes sold to Asian and European customers. By the end of 2022, Oman's LNG exports had grown by 8.5% y/y, reaching an all-time high of 11.5 million tons for the year.  The new annual record was the result of a successful debottlenecking program that was adopted in 2020 to boost Oman’s Qalhat LNG plant production by 10% to reach 11.5 million tonnes per annum (mtpa), up from 10.4 mtpa.

Oman’s LNG Exports, Jan-April 2023

Since the start of 2023, monthly LNG exports from the Qalhat LNG plant have stood at around 1 million tons. In March alone, Oman’s total LNG exports increased to an all-time high of 1.1 million tons.  The Gulf country’s total LNG exports increased by 4 million tons during the period between January and April, an uptick of 7% y/y. If Oman maintains this high level of LNG exports until the end of the year, it could achieve an all-time high of 12 million tons.

Historically, Asia has been the main market for Oman, considering its contracts with Japan and Korea since the inception of the Oman LNG plant in 2000. However, Russia’s invasion of Ukraine last year has increased Europe’s appetite for LNG, offering Oman LNG the opportunity to send its shipments to new markets in Europe and replace some Russian gas.  In March, France received a rare 70,000 tons of LNG from Oman, which was the second LNG cargo from the Gulf country since the start of Russia’s invasion of Ukraine in February 2022. 

The following month, Croatia received its first-ever Omani LNG cargo, adding itself to the list of buyers of Omani LNG. Based on shipping data compiled by the EOA, Europe received 400,000 tons of LNG from Oman in the first four months of 2023, an uptick of 116% y/y, while the number of Oman LNG’s European markets increased to three, including Spain, France, and Croatia, plus Turkey (see Figure 1 below)

Potential Output Boost to 12 mpta

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