The Ministry of Energy and Minerals, OQ and Oman LNG sign agreements with Shell for the development of hydrogen and gas

The Ministry of Energy and Minerals, OQ and Oman LNG sign agreements with Shell for the development of hydrogen and gas

Tuesday, January 10, 2023

The Ministry of Energy and Minerals (MEM) recently signed a Letter of Intent to explore opportunities for the production of Liquefied Synthetic Gas (LSG) in the Sultanate of Oman.

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.

The agreement was signed by HE Eng. Salim Nasser Al Aufi, Minister of Energy and Minerals, and Walid Hadi, Senior Vice President and Country Chair, Oman Shell.

Commenting on the agreement, HE Eng. Salim Al Aufi said, “This agreement is evidence of our confidence in the future of the Sultanate of Oman as a multiple energy source hub, as well as the rapid development of its interest in renewable energy and green hydrogen production. The Ministry works with care to achieve optimal utilisation of the Sultanate of Oman’s natural resources, by employing the capabilities and modern technologies in the fields of energy with our partners in the sector.”

Additionally, Oman LNG LLC and Shell International Trading Middle East FZE announced the signing of a term sheet for the offtake of 0.8 million ton per annum (mtpa) of Liquefied Natural Gas from Oman LNG, for ten years starting from 2025. The agreement builds on those signed in December with Japanese buyers and strengthens Oman’s global position of continuing to export LNG.

Such step marks another milestone in the history of Oman LNG, where it complements the company’s strive to extend its contracts Beyond 2024, with a strong interest to leverage partnership with various firms around the world.

This commitment ensures Oman LNG will maintain its strong position in the global LNG market and contribute to global energy security, delivering clean and reliable energy.

Furthermore, the LNG plant at Qalhat, in Sur, has successfully completed its debottlenecking project to increase its capacity by 10% to 11.4mtpa.

Commenting on this agreement, Hamed Al Naamany- CEO of Oman LNG- mentioned: “We are delighted to sign this term-sheet agreement with Shell, who has been our partner in the industry for many years. This agreement leverages the opportunities to place Oman LNG in a very competitive market, with strong partners allowing us to grow our market access.”

OQ and Shell International sign a Partnership Agreement for Developing Green Hydrogen in Oman after Acquiring a 35% shareholding interest in Green Energy Oman (GEO) project

An international consortium comprised of OQ, which is the Sultanate of Oman’s global integrated energy company, InterContinental Energy, the leading dedicated green fuels developer, EnerTech, a Kuwaiti state-owned company focused on clean energy investment and development, and Golden Wellspring Wealth for Trading LLC , signed today a joint development and collaboration agreement with Shell to cooperate in further developing the Green Energy Oman (GEO) project.

The project has been under development since 2018 and it is expected to be developed in multiple phases to produce at full capacity, around 1.8 million tonnes of green hydrogen. Shell will join the consortium as the lead Operating Partner after acquiring a 35% equity holding from the Consortium.

This agreement was signed by H.E Engineer Salim Bin Nasser Al-Aufi, Minister of Energy and Minerals, on behalf of the partners, Ms. Najla Bint Zuhair Al-Jamali, CEO of Alternative Energy at OQ and Walid Hadi, Senior Vice President and Country Chair of Shell -Oman.

On this occasion, Najla Bint Zuhair Al-Jamali, CEO of Alternative Energy at OQ, said: "The entry of Shell to this vital project constitutes a qualitative step that will enable the consortium to benefit from their advanced global expertise in this field. This will surely contribute to achieving the desired objectives of the project. Shell is a pioneering company in the alternative energy sector and entertains great technical and practical experience that would directly help in developing all phases of the project. 

"We are pleased with the progress made by the project during the past few years and look forward to enhancing our cooperation with our partners in this project. We are also delighted with Shell’s admission to the consortium" She added.

Al-Jamali explained that the GEO Project is one of the best specialized projects that seek to provide the necessary green energy sources to meet the increasing global demand on carbon-free fuel.

Commenting on the new signed agreements with the Ministry of Energy and Minerals, Walid Hadi said, “We are pleased to sign these important agreements that will strengthen our partnership with the Sultanate of Oman. This will be Shell’s first long-term LNG offtake from Oman and the agreement supports continued production from Oman LNG into the 2030s. We’re proud of the contribution we have made to the success of the venture to date and pleased to be deepening our relationship.”

He added: “With our entry to the Green Energy Oman (GEO) consortium, we are taking a further step to advance lower and zero emissions energy projects in Oman. The project remains in its early phase, but this is a sign of the potential we see for Oman through the energy transition. We also look forward to working together with the Ministry of Energy and Minerals to explore the sustainable development of the first integrated Liquefied Synthetic Gas (LSG) value chain.”

InterContinental Energy (ICE) welcomed Shell’s admission to the GEO consortium. Mr. Tony Nieman, Head of Middle East at ICE, said: “Our company is pleased to welcome Shell as the future Operating Partner in Green Energy Oman (GEO).  The deep experience and expertise that Shell brings is a major step towards bringing our mega-project to the next phase. ICE has been working in partnership with Oman and our partners since 2018, and today marks an important milestone in realizing the vision for the GEO project to deliver more than 1.8 million tons per annum of green hydrogen to accelerate the energy transition both in Oman and internationally.”

Abdullah Al Mutairi, EnerTech’s CEO, stated “EnerTech has long viewed Oman as a strategic market for development of our clean energy business. We have been an early mover into the green hydrogen space and we see the long-term positive impacts of developing this sector in Oman for the region and globally. Shell’s entry into this consortium is further justification of the importance of this sector to the region and we are excited to continue developing GEO alongside them”.

-Since 2019 - the consortium has deployed a series of 140m high meteorological masts across the site collecting valuable solar and wind data. During the past year, a series of key studies have been awarded to progress the project such as the Concept Feasibility study conducted by Worley, the Environment & Social Impact Assessment study conducted by HMR as well as the Energy Yield Assessment conducted by DNV.

The project, which supports the Oman Vision 2040, will further expand Oman’s skills base and technical expertise in renewable energy, provide potential significant in-country value, as well as creating jobs during the project lifecycle.-

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