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China’s Unipec has signed a contract with Oman LNG for the delivery of 1 million tons of the super-chilled fuel over a period of four years.
This is the first contract with a Chinese buyer for Oman LNG and is part of its efforts to reach new markets, the Omani company said in a tweet. The deliveries will begin in 2025, it also said.
The deal follows another that Oman LNG signed last month with Turkey’s BOTAS, for annual deliveries of 1.4 billion cubic meters of gas over a period of ten years.
Earlier this year, the Omani company also sealed LNG delivery deals with French TotalEnergies and Thai PTT. Each of the companies will receive 800,000 tons of LNG annually, with French deliveries commencing in 2025 for a period of 10 years, and Tahi deliveries starting a year later for a period of nine years.
Japanese energy majors JERA, Mitsui & Co, and Itochu Corp are also among the clients of Oman LNG and recently inked deals for the supply of a total of 2.35 million tons of LNG annually over 10 years, beginning in 2025.
Rystad Energy four years ago forecast that gas production in the tiny Gulf country will this year surpass its oil production, in evidence of the growing attractiveness of natural gas as a source of energy.
Since then, competition for gas has intensified, motivating production expansion plans in all the large producers of LNG—Qatar, the United States, and Australia. Yet even smaller producers such as Oman are expanding production in response to strong demand.
China is a natural target for LNG producers given the size of its economy and levels of industrialization that requires massive energy inputs. Although it last year lost the crown of top LNG importer in the world to Japan, China remains one of the biggest buyers of the commodity and, unlike European countries, is willing to commit to long-term deals to secure precious supply and hedge against wild price fluctuations.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com