Oman LNG Signs Final Contract To Supply Enron's Dabhol Terminal With LNG.

The Shell-led Oman LNG Company and Enron have signed the final sale and purchase agreement (SPA) for the US company to take 1.6 million tons/year of LNG to its Dabhol terminal in western India for a period of 20 year. Shipments from Oman's LNG terminal at Al Ghalilah, near Sur, are to begin from late 2001.

The SPA was signed on Dec. 8. The Omani LNG will be re-gasified and this will fuel a 2,184 MW power plant at Dabhol, where Enron is the leading partner.

Oman LNG had earlier signed an initial deal with Enron for the supply of 1.2 million t/y. In subsequent negotiations Enron agreed to raise its offtake to 1.6 million t/y.

After the Omani deal, Enron last week signed a final SPA with Abu Dhabi Gas Liquefaction Co. (ADGAS) to take 500,000 t/y of LNG for a 20-year period starting from late 2001.

Enron is continuing negotiations with the Ras Laffan LNG venture, Rasgas, for the purchase of 3 million t/y to meet Dabhol expansions in the next decade.

Rasgas is owned 63% by state-owned Qatar General Petroleum Corp. (QGPC), 25% by Mobil which is the project leader, 5% by a South Korean group including Kogas, and 7% by two Japanese trading groups - Itochu (4%) and Nissho Iwai (3%). Its two 3.3 million t/y trains, to be on stream in April 1999, constitute a first phase. The second phase will involve another two 3.3 million t/y trains to be built in the next decade, but the partnership in that Mobil-led venture would be different; it could include Elf Aquitaine of France and Sumitomo Corp. of Japan, if these companies manage to secure firm buyers.

Last October, Oman LNG signed the final SPA with Osaka Gas  of Japan for a 25- year supply of 700,000 t/y from Nov. 2000. This made Oman the sixth LNG supplier to Osaka, meeting 10% of its needs, with Osaka Gas having already ordered a tanker to take the LNG from Al Ghalilah to its terminal in the Kansai area.

The partners in Oman LNG are the Oman government (51%), project leader Shell (30%), Total (5.54%), a South Korean group including Kogas called Korea LNG (5%), Mitsubishi Corp. (2.77%), Mitsui & Co. (2.77%), Partex (2%), and Itochu Corp. (0.92%).

Oman LNG's complex at Al Ghalilah is progressing ahead of schedule. It will have a capacity of 6.6m t/y with test production now set to start at the end of 1999, instead of an earlier target of August 2000.

This will present Shell with a big challenge as it will have to find short- term clients to buy the LNG output from early 2000. The task would be very difficult in view of a fall in Asian demand and a major increase in LNG supply projects expected by then.

Nigeria LNG (NLNG), another project led by Shell, is scheduled to be on stream in October 1999. It will consist of two trains with a total capacity of 5.9 million t/y. Shell is promoting a third train to raise its capacity to 8.7 million t/y by 2002/3 and a final decision on this is to be taken in the first quarter of 1999. NLNG is owned 51% by Shell, Agip and Elf and 49% by the Nigerian National Petroleum Co. (NNPC).

Oman LNG's main client will be Korea Gas Corp. (Kogas), having signed a 25- year SPA to take 4.1 million t/y from November 2000, but the Oman LNG partners have been worried that Kogas may have problems lifting the whole volume in view of the economic crisis in South Korea. Plans to sell LNG to Thailand collapsed in late 1997 after a crisis hit its economy (see Oman survey in Vol.

50).