Shell forms LNG and hydrogen partnerships with Oman

Oil and gas giant Shell has signed multiple partnership agreements with Oman’s Ministry of Energy and Minerals, Oman LNG and OQ, former Oman Oil Company, in fields of liquefied natural gas (LNG) and hydrogen.

On 10 January, Oman LNG revealed it had signed a term sheet with Shell International Trading Middle East FZE for the offtake of 0.8 million tons per annum (mtpa) of LNG for ten years starting from 2025.

The agreement is said to mark Shell’s first long-term offtake from Oman and, at the same time, represent a milestone in the history of Oman LNG, where it complements the company’s strive to extend its contracts beyond 2024.

With OQ, Shell International signed a partnership agreement for developing green hydrogen in Oman after acquiring a 35% shareholding interest in Green Energy Oman (GEO) project.

Other members of the consortium in the project include OQ (through its subsidiary Oman Energy Development), InterContinental Energy Limited, EnerTech Holding Company KSCC and Golden Wellspring Wealth for Trading LLC.

The project is expected to be developed in multiple phases to produce at full capacity, around 1.8 million tonnes of green hydrogen.

Furthermore, Oman Shell entered into a Letter of Intent (LoI) with the Ministry of Energy and Minerals to explore opportunities for the production of liquefied synthetic gas (LSG) in the country.

LSG is produced when green hydrogen is combined with captured carbon dioxide to produce natural gas which is then liquefied. This low-carbon gas can be directly introduced to existing gas networks and infrastructure, including the liquefied natural gas stations of the Oman LNG company, all the way to the end user.

At the end of 2022, Oman LNG signed long-term agreements with three Japanese companies – Itochu Corporation, JERA and Mitsui & Co – to deliver LNG at a total volume of 2.35 mtpa starting from 2025.