OQ, the global integrated energy group, has announced the final investment decision with TotalEnergies for the construction of the Marsa LNG Bunkering project at Sohar Port, at a total cost of USD 1.6 billion, with TotalEnergies contributing 80% and OQ 20% via their incorporated joint venture Marsa Liquefied Natural Gas LLC.
The project integrates an upstream and downstream business segments. The upstream component entails the production of 150 million cubic feet per day of gas from Block 10 which will be subsequently transported through OQGN’s gas network to Sohar Port.
The downstream component involves the construction of an LNG plant with a capacity of 1 million tons per year, along with a renewable energy power plant with a capacity of 300 MW of PV solar power to provide the total annual energy needs of the LNG plant.
The Marsa LNG Bunkering project will achieve two remarkable milestones in the region; a plant with emissions of less than 3 kg of carbon dioxide for every oil equivalent barrel, and building the first-of-its-kind LNG bunkering facility in the Middle East.
The ceremony also witnessed the signing of the Fiscal Protocol among the Government of the Sultanate of Oman represented by the Ministry of Energy and Minerals, Marsa Liquefied Natural Gas LLC (a joint venture between OQ and Total), TotalEnergies EP Oman Development B.V. and Almuzn Liquified Natural Gas LLC (a fully owned subsidiary of OQ) in the presence of Eng. Salim Nasser Al Aufi, Minister of Energy and Minerals, Mulham Bashir Al Jarf, Chairman of OQ Board of Directors and Patrick Pouyanné, Chairman and CEO of TotalEnergies.
The Marsa LNG project reflects OQ’s commitment to strategically contributing to the development of Oman’s energy sector for creating long-term sustainable value. This global collaboration is a testament to OQ’s consistent steps and unified goals towards supporting economic growth in the Sultanate of Oman, in addition to diversifying OQ’s investments in a new energy area, i.e. LNG bunkering facility for ship fueling.
The signing of this fiscal protocol and the announcement of the final investment decision signal OQ’s strategy to chart a sustainable future for the energy sector. The project is also expected to contribute to the enhancement of In-Country Value (ICV).
The Marsa LNG plant will be 100% electrically driven, positioning it as the lowest GHG intensity LNG plant ever built worldwide by setting a standard with such a GHG efficiency. The full electrical design of the plant and the integration of the solar farm will eliminate more than 200 kt/y of CO2e over the lifetime of the project, compared to a fuel gas-based design.
The goal of the Marsa LNG project is to serve as the first LNG bunkering hub in the Middle East, showcasing an available and competitive alternative marine fuel to reduce the shipping industry’s carbon footprint. Compared to conventional marine fuel, LNG helps to cut GHG emissions by up to 23%, sulfur emissions by 99%, fine particle emissions by 99% and nitrogen oxide emissions by up to 85%.
This project is set to have significant economic dimensions by boosting the revenues of the Sultanate of Oman’s treasury and adding local value through joint local investments. The partnership with TotalEnergies will contribute to providing additional direct financial revenues to Oman, increasing traffic in Omani ports, as well as enhancing local investments, expanding the gas and alternative energy supply network, and creating new job opportunities in Oman.
