TotalEnergies starts gas production from Oman's onshore Block 10

The French company also signed a long-term purchase contract with Oman LNG

France's TotalEnergies has signed an agreement with Oman LNG to buy 0.8 million metric tonnes of LNG per year over 10 years, starting from 2025. AFP

France’s TotalEnergies has begun gas production from onshore Block 10 in Oman, in line with its growth strategy focusing on fuels contributing to the energy transition.

The total gas output from the Mabrouk North-East field in the onshore Block 10 is expected to reach 500 million standard cubic feet per day by mid-2024, TotalEnergies said in a statement on Friday.

TotalEnergies has a 26.55 per cent stake in Block 10, with Oman’s state-owned OQ holding a 20 per cent stake and Shell, the operator, having a 53.45 per cent interest.

The latest gas production follows the signing of the concession agreement in December 2021. The produced gas will supply the Omani gas network, feeding both local industry and liquefied natural gas export facilities.

TotalEnergies has also signed an agreement with state-owned Oman LNG for the purchase of 0.8 million metric tonnes of LNG per year over a period of 10 years starting from 2025.

“This new contract will contribute to TotalEnergies' LNG integrated portfolio and reinforce its flexibility, by allowing it to address both the European and Asian markets,” TotalEnergies said.

LNG is natural gas that turns into a colourless and non-toxic liquid when cooled to about minus 162°C.

The cooling process shrinks the volume of the gas, making it easy to ship and store.

LNG produces 40 per cent less carbon dioxide than coal and about 20 per cent less than oil, and is widely seen as a cleaner alternative.

It can be used for cooking and heating, as a fuel for commercial vehicles, generating electricity, as well as manufacturing products such as fertilisers, paints and medicines.

Demand for LNG is rising globally amid green transition efforts and the Russia-Ukraine war.

Russia, Europe’s top natural gas supplier, began reducing its exports to the continent in response to wide-ranging economic sanctions, forcing European countries to look for alternative sources of supply.

LNG is also playing a critical role in the energy transition, boosting its demand in global markets.

“These announcements are consistent with the ambition of TotalEnergies to contribute to the energy transition and reinforce its long-standing partnerships with both Oman LNG and the Omani state”, said Patrick Pouyanne, chairman and chief executive of TotalEnergies.

Last month, TotalEnergies and Italian energy company Eni announced a natural gas discovery at the Zeus-1 well off Cyprus. It is also working towards developing its new Lebanon Block 9 offshore gas project this year.

The Paris-based company recently signed 30 megawatts of solar projects in Oman to boost its clean energy portfolio.