The Oman LNG (OLNG) company announced the signing of a Sale and Purchase Agreement (SPA) to sell 0.7 million tons per annum (mtpa) of Liquefied Natural Gas (LNG) over five years to Shell Western to supply Shell's downstream gas markets in Spain.
This is Shell’s first five-year deal. Beginning this year, the LNG will be delivered to Spain by Shell-owned LNG carriers, which OLNG has an option to replace with its own ship from 2004 onwards, according to a company press release.
“Originally our customers had been supplying their own ships for these long-term contracts—KOGAS, Osaka and Dabhol being good examples—while we found an increasing need to secure some shipping capacity ourselves. This also follows the aspiration of the government of Oman, which is considering building its own fleet of LNG ships to be provided to OLNG,” OLNG General Manager and Chief Executive Agnus Cassens explained.
“The sale of all the LNG coupled with the rapid development of the project makes OLNG one of the most successful gas ventures undertaken in recent years... It is due in no small part to the partnership that has developed between the government and the company's private shareholders,” said Cassens.
This agreement is OLNG's fourth medium-long term SPA. In October 1996 an SPA was signed with Korea Gas Corporation to supply 4.1 mtpa LNG for 25 years starting in April 2000. Another SPA was signed in October 1998 with Osaka Gas of Japan to supply 0.7 mtpa LNG for 25 years starting in November 2000. In December 1998 a SPA was signed with Dabhol Power Company of India to supply 1.6 mtpa LNG for 20 years starting late 2001. A SPA was signed in June 1999 with Total of France to sell 130,000 tons of NGLs for 18 months, which was later extended.
Oman LNG LLC (Limited Liability Company) is a joint venture between the government of Oman holding 51 percent, Royal Dutch/Shell Group which hold 30 percent, Total with 5.54 percent from France, Korea LNG with five percent from Korea, Partex—two percent—from Portugal and Japanese companies Mitsubishi (2.77 percent), Mitsui (2.77 percent) and Itochu (0.92 percent). — (menareport.com)
© 2002 Mena Report (www.menareport.com)
