(Photo credit: Oman LNG)
Oman LNG announced on 7 February the signing of an agreement with China International and Chemical Co (Unipec) to supply 1 million metric tons per year of liquefied natural gas (LNG) starting in 2025.
Unipec has become the first Chinese firm to sign a deal with Oman LNG.
The Oman Observer quoted Hamed al Naamany, CEO of Oman LNG, saying: “The term-sheet signing with Unipec marks another milestone, where the Omani LNG will be creating new opportunities in China. Such agreement will further enhance our position in the global energy industry, and ensure we maintain our reputation as a clean and reliable energy supplier worldwide.”
Unipec is the trading arm of Asia’s largest refiner, Sinopec, which last year signed a 27-year supply deal with QatarEnergy for 4 million tons of LNG per year, the most extended such agreement to date.
The deal with Unipec followed other recent deals for Oman to provide 2.35 tons annually to Japan’s main electricity generator JERA and trading houses Mitsui & Co and Itochu Corp starting in 2025 and to provide 1.4 billion cubic meters of gas to Turkiye state energy company BOTAS, beginning in 2025 as well.
Turkiye primarily relied on Russia for its gas supply before the Russian invasion of Ukraine. Numerous pipelines have since ceased operations due to the resultant western sanctions. This benefited LNG suppliers such as Oman, Qatar, Australia, and, notably, the US.
The US began exporting LNG in 2016 and, by the first half of 2022, had become the world’s largest LNG exporter. US LNG exports increased by 12 percent in the first half of 2022 alone, averaging 11.2 billion cubic feet per day (Bcf/d).
The US and others of the world’s LNG suppliers benefitted further from the September 2022 destruction of the Nord Stream 2 Pipeline, which had supplied Russian gas to the EU, particularly to Germany, at much lower prices.