OQEP, TotalEnergies break ground at $1.6bn Marsa LNG Project in Suhar
Suhar – The groundbreaking ceremony for the Marsa LNG Project took place on Thursday in the Wilayat of Suhar, marking the launch of the largest joint investment between Oman's OQ Exploration and Production (OQEP) and French energy giant TotalEnergies. Valued at $1.6bn, the project is led by TotalEnergies with an 80% stake, while OQEP holds the remaining 20%.
The groundbreaking ceremony was held under the patronage of H E Eng Salim bin Nasser al Aufi, Minister of Energy and Minerals, and attended by senior officials from TotalEnergies, OQEP, international investors, and business leaders.
The Marsa LNG Project reflects OQEP's strategic commitment to developing Oman's energy sector in a way that delivers long-term sustainable value. It also marks the company's expansion into a new energy domain, LNG bunkering, which aligns with its strategy to build a more sustainable energy future. The implementation of the Marsa LNG Project strengthens Oman's position as a regional hub for clean marine fuel and represents a strategic partnership between OQEP and TotalEnergies.
The project is the first of its kind in the Middle East for supplying ships with liquefied natural gas (LNG) as fuel, supporting the reduction of the maritime transport sector's carbon footprint through the establishment of low-emission infrastructure.
In a press statement, H E Aufi said, 'The Ministry of Energy and Minerals reaffirms its commitment to supporting downstream energy projects as a key pillar for achieving economic integration across the sectors of industry, trade, ports, and logistics. The Marsa LNG Project embodies this vision through the development of advanced infrastructure to supply ships with LNG as a clean alternative fuel.'
'This project represents a major step forward in the transition towards low-emission energy, reinforcing Oman's position as a reliable regional hub for clean marine fuel. It aligns with the objectives of Oman Vision 2040 in sustainability and industrial innovation. We value this partnership and believe that downstream energy investments will drive economic growth, create high-quality and sustainable job opportunities, promote knowledge transfer, and empower national talent to meet the rising global demand for sustainable energy.'
Patrick Pouyanné, Chairman and CEO of TotalEnergies, said, 'I'm very proud to see Marsa LNG breaking ground, alongside our longstanding partner OQEP, and with the strong support from Oman's authorities. This flagship project demonstrates that LNG production can be very low carbon, contributing to make gas a long-term transition fuel. With an ambitious technical design, we intend to set the standard and pave the way for the next generation of low-emissions LNG plants across the world. We also offer an effective way to support the shipping sector's energy transition, by providing lower-emissions marine fuel in a key location at the entrance of the Gulf.'
Eng Ahmed al Azkawi, CEO of OQEP, said, 'The Marsa LNG Project represents a bold step forward, harnessing cutting-edge technology and strategic collaboration to ensure a cleaner, and affordable energy future. As the first LNG bunkering hub in the Middle East, Marsa LNG will play a pivotal role in reducing emissions in the shipping industry while reinforcing Oman's position as a key player in the global energy sector. We take immense pride in contributing to this transformative journey, one that sets new standards for low-carbon energy solutions.'
The project consists of both upstream and downstream components. The upstream component includes the production of 150mn standard cubic feet of gas per day from Concession Block 10, which will then be transported via OQ's gas network to Sohar Port. The downstream component features a state-of-the-art LNG liquefaction plant with a capacity of 1mn tonnes per year, currently under construction at Sohar Port. LNG production is expected to begin in the first quarter of 2028 and will primarily cater to the marine fuel market (LNG bunkering) in the Gulf region.
Notably, the Marsa LNG facility will be fully electrified and powered entirely by solar energy, positioning it among the lowest greenhouse gas intensity LNG plants globally, with emissions below 3 kg CO2e/boe, nearly 90% lower than the industry average of 35 kg CO2e/boe.
The full electrification of the LNG plant will lead to over 6% increase in net production, with 99% of incoming natural gas converted into LNG. This setup offers greater operational flexibility and reduced maintenance costs. The site will also feature integrated infrastructure, including a 165,000 cubic metres of LNG storage tank and a 500-metre jetty designed to accommodate bunkering vessels and LNG carriers for regional export.
A dedicated 300 MWp solar power plant will be constructed over a 450-hectare area to meet 100% of the LNG plant's energy needs.
Marsa LNG is set to become the Middle East's first and leading LNG bunkering hub, strategically located in Suhar at the entrance to the Gulf, a major global shipping corridor. TotalEnergies has commissioned a new LNG bunkering vessel, the Monte Shams, with a capacity of 18,600 cubic metres. The vessel, named after Oman's Jabal Shams (Mountain of the Sun), will begin operations in mid-2028, joining TotalEnergies' growing fleet that includes Gas Agility (Rotterdam), Gas Vitality (Marseille), and Brassavola (Singapore).
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Observer
9 hours ago
- Observer
Oman's fiscal consolidation a model of economic reform: World Bank
MUSCAT, JUNE 20 Oman's fiscal consolidation journey has been hailed by the World Bank as a notable example of effective economic reform and responsible fiscal management. In its latest Gulf Economic Update, published by the Economic Policy Unit of the World Bank Group for the MENA region, the multilateral institution highlights the measures implemented by the Omani government to restore fiscal balance following the twin shocks of the 2014 oil price collapse and the Covid-19 pandemic. 'Oman has made substantial progress in enhancing its economic resilience and building a foundation for sustainable growth,' the report stated. 'Like other GCC countries, it has grappled with the challenge of reducing dependence on oil revenues while managing public finances amid volatile global oil prices. During previous periods of low oil prices, Oman experienced twin deficits and relied heavily on borrowing to cover fiscal gaps. In recent years, however, it has undertaken significant steps to reduce its reliance on oil and strengthen fiscal sustainability.' The report cited major reforms introduced under Oman Vision 2040 and the 2020–2024 Medium-Term Fiscal Plan (MTFP) as critical to achieving this progress. These initiatives helped diversify revenue streams, improve public spending efficiency, and manage oil windfalls more prudently. 'These reforms have delivered tangible results,' the report emphasised. 'Since 2022, Oman has markedly improved its fiscal position, notably by reducing public debt through the strategic deployment of oil windfalls. This has expanded fiscal space and enhanced the country's capacity to withstand external shocks. Oman's experience stands out as a model of effective fiscal consolidation and economic reform.' The World Bank also noted Oman's gradual progress in economic diversification. While the hydrocarbon sector continues to dominate, its share of GDP has steadily declined over the past two decades in favour of services, albeit at a modest pace. Within the services sector, wholesale and retail trade, public administration, and defence remain dominant, while sectors like tourism and ICT have yet to significantly expand their economic footprint. Manufacturing has grown in importance but remains concentrated, with nearly 40 per cent of output derived from chemicals and related products. A particularly positive development is the growth of non-hydrocarbon exports, which now account for roughly one-third of total exports, compared to just 12 per cent in the early 2010s. 'Key non-oil exports include chemicals, base metals (especially aluminium), plastics, and mineral products,' the report noted. 'Re-exports — mainly vehicles, electricals, and machinery — have declined in share over the past decade. Oman's key export destinations include the UAE, Saudi Arabia, the US, and India. As for oil exports, China remains the dominant market, receiving nearly 94 per cent of Oman's crude exports.' The report also credited the MTFP with delivering successive fiscal surpluses since 2022 and significantly reducing public debt. 'MTFP targets for fiscal balance were met — and even exceeded,' the report stated. 'Public spending was significantly curtailed, dropping by around 16 per cent of GDP during the five-year period. Public debt declined sharply from approximately 68 per cent of GDP in 2020 to an estimated 35 per cent in 2024, reflecting prudent fiscal management and accelerated debt repayments.' To sustain momentum, the report recommended further domestic revenue mobilisation, with measures already underway — such as the draft Personal Income Tax (PIT) bill currently under consideration. 'Despite the progress made, Oman's economy remains sensitive to global oil prices and demand,' the report cautioned. 'Further efforts to broaden non-oil revenues and continue rationalising public spending — while improving its efficiency and equity — will require a balanced approach that ensures societal buy-in. Strengthening institutional capacity, enhancing governance, and fostering a culture of fiscal responsibility are also essential to create additional fiscal space for growth-enhancing investments and ensure long-term fiscal sustainability.' According to the World Bank, Oman's economic growth is projected to gradually accelerate, rising from 1.7 per cent in 2024 to 3 per cent in 2025, 3.7 per cent in 2026, and 4 per cent in 2027. The rebound will be driven by a 2.1 per cent increase in oil GDP in 2025 and 3.4 per cent growth in non-oil sectors, particularly in construction, manufacturing and services.
Observer
a day ago
- Observer
‘LNG from Oman': Unified brand for Oman's LNG
MUSCAT, JUNE 19 With two more LNG projects currently under development and construction, the Sultanate is seeking to leverage this significant expansion of its LNG industry to build a new brand around the global sales of LNG from Oman. Stylised as 'LNG from Oman', this brand will encompass exports from Oman LNG's three-train complex at Qalhat, future production from the under-construction Marsa LNG bunkering project at Sohar Port, and the proposed fourth LNG train project, dubbed 'Sur LNG', which is currently under deliberation. According to Hamed al Naamany, CEO of Oman LNG, the branding initiative aims to capitalise on the strong foundations of trust, reliability, and flexibility that have characterised Oman's LNG exports over the past two decades. 'We're delivering 'LNG from Oman' because that is the brand the global market recognises and trusts,' Al Naamany said. 'This includes Sur LNG, our planned fourth train, and Marsa LNG in Sohar, a dedicated bunkering facility being built in partnership with TotalEnergies and our sister company OQ. Oman's market positioning is not about who operates the plant but the reliability and flexibility of the product from the country,' he added in an interview with The Energy Year (formerly The Oil & Gas Year). Elaborating on this point, Al Naamany described LNG from Oman as a brand offering a 'differentiated value proposition.' He explained: 'We work closely with different types of buyers – whether in Europe, Asia, or among portfolio players – to tailor commercial flexibility to their needs and ours. We are known as one of the most agile producers globally. We listen to our customers while meeting the expectations of our government. That dual responsiveness resulted in the successful signing of long-term agreements in record time.' Majority government-owned Oman LNG will play a pivotal role in this new brand positioning, the CEO noted. To this end, the company plans to build on its recent debottlenecking efforts, which enabled it to produce a record 12 million tonnes of LNG in 2024, surpassing its nameplate capacity of 11.4 million tonnes. This additional capacity, he added, has enhanced the company's ability to respond to spot-market demand and seasonal fluctuations. He further noted that nearly 85% of Oman LNG's volumes are now secured through term contracts ranging from three to ten years, offering a balance of stability and flexibility. Marsa LNG, meanwhile, will serve as a 'differentiator,' said Al Naamany. 'Marsa is the world's first purpose-built LNG bunkering facility. The location is fantastic, and we're all for it. Global shipping is shifting to LNG-fuelled vessels, and Oman sits on a key trade route. The government's decision to develop Marsa sends a powerful message: Oman will participate in every LNG market segment – power, transport, bunkering – as part of its growth and diversification agenda.' Also integral to the new branding is the Sur LNG project – a fourth train with a planned capacity of 3.8 million tonnes per annum, slated for launch by 2029, subject to a Final Investment Decision (FID). 'Sur LNG aims to be ready this year with a full proposal,' said Al Naamany. 'The final decision will rest with the government and the partners. The market clearly wants the product, and with a compelling value proposition, we could see delivery in less than four years from approval.' Feedstock for Oman LNG, Qalhat LNG and the proposed Sur LNG project is expected to come from a variety of sources, Al Naamany noted. 'We've always been flexible. When Khazzan came on line in 2018, we adapted. Our facilities at Oman LNG, Qalhat LNG, and Sur LNG are designed to process various gas compositions. We don't rely on specific fields; we adjust to what the government assigns. Our competitive edge lies in modifying plants cost-effectively while maintaining output.' Another pillar of Oman LNG's competitive edge in the global market is its 'commercial agility', he said, adding that the use of advanced optimisation tools – such as swapping, diverting, and re-trading – has contributed significantly to this strength. 'That's why energy traders and large portfolio players are partnering with us. We now have 14 Sales and Purchase Agreements (SPAs) with companies such as Botas, Shell, BP, TotalEnergies, Jera, Mitsui, Vitol, Mercuria, Kansai Electric Power, PTT, SEFE, OQT, and Sinopec, delivering volumes from 2025 to 2034. And there's more to come,' Al Naamany concluded.
Times of Oman
2 days ago
- Times of Oman
CBO joins network for greening the financial system
Muscat: The Central Bank of Oman (CBO) has officially announced its membership in the Network for Greening the Financial System (NGFS), a global alliance of central banks and supervisory authorities aimed at enhancing the financial sector's resilience to climate-related and environmental risks. Launched during the "One Planet Summit" in Paris in December 2017 with eight founding members, the NGFS has since expanded into a worldwide network comprising over 160 central banks and regulatory bodies. The initiative seeks to collaborate with members in transforming the financial and banking systems into environmentally friendly and sustainable models. This is achieved through knowledge-sharing, cooperation, and the adoption of international best practices in developing regulatory frameworks to promote sustainability. The CBO's membership underscores its steadfast commitment to building a resilient, sustainable, and forward-looking financial system. This move aligns with Oman Vision 2040, the Sultanate of Oman's national strategy for a structured transition toward net-zero emissions, as well as the launch of the National Environmental Policy for Energy. As part of its strategic climate initiatives, the CBO has introduced a comprehensive regulatory framework and roadmap designed to advance sustainable and green finance in line with international standards and Oman's goal of achievingcarbon neutrality by 2050. These efforts include phased disclosure requirements for licensed financial institutions, alongside active participation in global climate initiatives, such as those led by the G20. Through this membership, the CBO joins a collaborative international effort to promote sustainable finance and strengthen the financial sector's readiness in addressing escalating challenges posed by climate change and ecosystem degradation. —— Ends/AH
