January 22, 2018 / 2:52 PM / 4 months ago

BP and Oman sign 1.1 million-tonnes-per-annum, seven-year LNG supply deal

LONDON (Reuters) - BP’s (BP.L) Singapore-based trading unit has signed a deal to buy 1.1 million tonnes of liquefied natural gas (LNG) a year for seven years from Oman LNG, after BP helped push up Omani gas production.

The logo of BP is seen at a petrol station in Kloten, Switzerland October 3, 2017. REUTERS/Arnd Wiegmann

The signing on Sunday in capital Muscat was attended by Oman’s Minister of Oil and Gas Al Rumhy and BP LNG Chief Operating Officer Jonathan Shepard.

First production from BP’s giant Khazzan gas field in September is reversing a decade-long decline in output from Oman’s 10.4 million-tonnes-per-annum-capacity (mtpa) LNG plant.

Oman LNG exported 8.2 mtpa last year, compared with 8 mtpa in 2016, 7.6 mtpa in 2015 and 7.4 mtpa in 2014, according to data on the Thomson Reuters Eikon terminal.

    Falling LNG exports stem from a government policy of prioritising gas for domestic electricity and industrial demand.

    Khazzan’s estimated 10.5 trillion cubic feet in recoverable gas resources offers a new source of feedstock for Oman LNG.

    The free-on-board terms of the deal allow BP to ship the cargoes anywhere without destination restrictions.

    Oman LNG is 51 percent owned by Oman, with Royal Dutch Shell (RDSa.L) accounting for 30 percent, Total (TOTF.PA) 5.54 percent, Mitsubishi (8058.T) 2.77 percent, Korea LNG 5 percent, Partex Corp 2 percent, Mitsui (8031.T) 2.77 percent and Itochu (8001.T) 0.92 percent.

    Reporting by Oleg Vukmanovic; Editing by Edmund Blair

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