A shareholders' agreement was signed on 15 September for the Qalhat LNGproject company between the government, Oman LNGand the principal offtaker, Spain's Union Fenosa. The project calls for the construction of a third liquefied natural gas (LNG) train at Qalhat, adjacent to the existing two trains owned by Oman LNG in Sur.
Muscat will take a 55.8 per cent stake in Qalhat LNG, Oman LNG will own 36.8 per cent and Union Fenosa will hold 7.4 per cent. The Spanish company has an offtake agreement for 50 per cent of the output from the 3.3 million-tonne-a-year (t/y) third train, while in July offtake agreements for smaller portions of the output were signed with three Japanese firms. Itochu Corporationwill lift 700,000 t/y for 20 years from 2006, Mitsubishi Corporationwill be supplied with 800,000 t/y for 15 years from 2006 and Osaka Gaswill purchase the same quantity for 17 years from 2009. It is expected that about 8 per cent of the government's stake will later be sold down to the three Japanese companies. Construction of the third train, being carried out by a joint venture of Japan's Chiyoda Corporationand Foster Wheeler Corporationof the US, is 75 per cent complete. Project costs are about $700 million. The preliminary information memorandum (PIM) is due out by the end of September on the commercial debt package, expected to be worth $550-600 million and have a tenor of 12 years. In August, a group of nine banks signed a $175 million term loan with Oman LNG to finance the company's equity stake in the project. Citigroupis financial adviser on both transactions (MEED 27:8:04).