Global energy major Shell has signed an agreement to extend its partnership with Oman LNG beyond 2024 as the demand for natural gas continues to grow amid green transition efforts.
As per the amended agreement, Shell Gas, a unit of Shell, will remain the largest private shareholder in Oman LNG, with a 30 per cent shareholding, and continue its role as technical adviser, the company said in a statement on Monday.
Oman LNG also signed various agreements to secure its gas supply until 2034.
Shell International Trading Middle East will also purchase up to 1.6 million tonnes per annum of LNG from Oman LNG from 2025 to 2034, making Shell the largest LNG off-taker from Oman LNG, the statement added.
“We believe liquefied natural gas’s role in the energy system will continue to grow and this milestone further demonstrates our commitment to our integrated gas business and to Oman as a key heartland to Shell,” said Zoe Yujnovich, Shell’s integrated gas and upstream director.
Natural gas, which emits 50 per cent less carbon dioxide than coal, is considered a key fuel as the world focuses on cutting emissions.
Competition for LNG increased after Russia's invasion of Ukraine last year, with Europe importing record volumes of the supercooled fuel to replace Moscow's gas supplies.
Global LNG trade hit a high of $450 billion in 2022 amid a surge in European demand, according to the International Energy Agency.
Shell also holds interests in Petroleum Development Oman, with a 34 per cent stake, and Shell Oman Marketing Company, with a 49 per cent stake. In January, Shell started producing gas from Mabrouk Field in Block 10, in which Shell holds 53.45 per cent interest.
Established by royal decree in 1994 after the discovery in the early 1990s of significant volumes of gas in the Sultanate, Oman LNG operates a "three-train plant" with a production capacity of 11.4 million tonnes of LNG a year.
in August, Oman LNG signed an agreement with Germany's Securing Energy for Europe to supply 400,000 tonnes of LNG a year, starting in 2026.
