Pact Signed to Establish LNG Bunker Project at Port of Sohar

Global integrated energy group OQ signed an investment agreement with TotalEnergies to establish the Marsa project to supply ships with liquefied natural gas (LNG) at the Port of Sohar, at a cost of US$1.6 billion, with TotalEnergies contributing 80 per cent of the project costs and OQ with 20 per cent of the joint investment. The project is characterised by the integration of the upper and lower parts; where the upper part involves the production of 150 million cubic feet per day of gas from Block 10 concession area, and then the gas is transported through OQ to gas networks to the Port of Sohar. The lower part involves building a liquefied natural gas plant with a capacity of one million tonnes annually, consisting of a renewable energy station by building a 300-megawatt solar power station to provide the annual energy needs for the liquefied natural gas plant. The Marsa LNG project will achieve two goals for the first time in the region: the establishment of a facility with emissions less than 3 kilograms of CO2 equivalent per barrel of oil equivalent, to reduce emissions of greenhouse gas, and a centre to supply ships with liquefied natural gas fuel, the first of its kind in the Middle East. The Marsa LNG project embodies OQ’s commitment to strategically contribute to the development of the energy sector in the Sultanate of Oman to achieve sustainable value in the long term. It also works to diversify OQ's investments in a new energy field, supplying ships with liquefied natural gas fuel, reflecting the company's strategy in shaping a sustainable future for the energy sector and is expected that the project will contribute to enhancing local value addition.

The Marsa LNG project will rely on electricity, making it the least greenhouse gas emissions-intensive plant in the world. It will set a new industrial emissions standard, and the full electrical design of the plant and the integration of the solar power station will avoid over 200,000 tonnes of CO2 equivalent annually over the life of the project, compared to the gas-fueled design. The project will establish the first centre to supply ships with liquefied natural gas in the Middle East, thus offering an alternative maritime fuel at competitive prices to contribute to reducing the carbon footprint of the maritime shipping sector. Liquefied natural gas compared to traditional maritime fuel, will help reduce greenhouse gas emissions by up to 23 per cent, sulfur emissions by 99 per cent, fine particle emissions by 99 per cent, and nitrogen oxide emissions by up to 85 per cent. Minister of Energy and Minerals Eng Salim bin Nasser al Aufi affirmed that the Marsa LNG project embodies Oman's strong commitment to achieving carbon neutrality by 2050 as it will contribute to reducing emissions, placing Oman on the world map in a special way, and will be operated fully with renewable electric power. He said in a statement to the Oman News Agency that the project is the first of its kind in the region, Middle East, and Africa, and the project's goal is to dispatch approximately 150,000 cubic feet of gas for use by ships. It will provide approximately 3,000 jobs during construction and will provide between 90 to 100 jobs at Sohar Port when operational, adding that the project will begin receiving ships in 2028. Mulham bin Basheer al Jarf, Chairman of OQ's Board of Directors, explained that entering into joint investments with the global French company TotalEnergies in the Marsa LNG project will represent the first natural gas supply centre for ships in the region. The project will be operated by solar power from the 300-megawatt photovoltaic solar power station. He added that the project will contribute to enhancing OQ's position as a major contributor in the liquefied natural gas markets. OQ's gas distribution network company will provide the necessary gas transportation services for the project.

Patrick Pouyanné, Chairman of the Board and CEO of TotalEnergies, stated that the project is an innovative low emission project that relies on clean energy derived from solar energy. He noted that such a project has been implemented before in the Netherlands and Singapore, and will now be implemented in Oman, reflecting the company's confidence in the Omani liquefied natural gas market. Ahmed bin Saeed al Azkawi, CEO of OQ Upstream, stated that the Marsa LNG project is a distinctive project in terms of integration between various sectors connected to OQ, such as the upper and lower sectors, alternative energy, as well as OQ Trading and OQ Gas Networks. They will be responsible for delivering gas from Block 10 concession in the governorate of Al Wusta to Sohar Port where it is planned to start operating a liquefied natural gas plant to supply ships with alternative energy that contributes to reducing emissions and the carbon footprint. The project benefits the economy with substantial economic feasibility by increasing cash flows to the state treasury and adding local value through joint investments. The partnership with Total Energies will boost activity in Omani ports, enhance investments in various sectors, and create employment opportunities for Omani youth. The Minister of Energy and Minerals highlighted that the strict Covid-19 requirements are in place to ensure the safety of the workforce and the community. These measures include regular testing, social distancing, and enhanced sanitation protocols. The project management team is dedicated to upholding these guidelines throughout all project phases to protect the health and well-being of all involved. The Marsa LNG project marks a significant milestone in Oman's commitment to sustainable energy development and environmental responsibility. It sets a precedent in the region and underscores Oman's dedication to fostering innovation and progress in the energy sector. The project's multifaceted approach integrates cutting-edge technologies and sustainable practices to create a model for responsible energy production and consumption.