Spain eyes third-train stake

05 April 2002

Spain's Union Fenosais understood to be in discussions with Oman LNGabout participating in the proposed third-train project at Sur. Local sources say that the Spanish utility, which already has an interest in the Damietta liquefied natural gas (LNG) project in Egypt, is preparing to send a delegation to Muscat to discuss the possibility of taking an equity stake in the planned facility and purchasing some of its output (MEED 10:8:01).

Oman LNG has been considering the construction of a 3.3 million-tonne-a-year (t/y) third train since mid 2000, when its board approved funds for its technical design. However, the company has repeatedly stated that the project's go-ahead will be contingent on securing long-term contracts for the train's output. Over the past two years, discussions have been held with prospective customers in the Far East, India and Europe. The proposed expansion will increase Oman LNG's capacity by 50 per cent.

Oman LNG already has spare capacity from its first two trains, following the decision by India's Dabhol Power Companynot to lift 1.6 million t/y of LNG starting in late 2001. Since being informed of DPC's decision, the gas exporter has been seeking customers for the LNG. In December, the company's largest foreign shareholder, Royal Dutch/Shell Group, signed up for a 700,000-t/y, five-year contract to supply its customers in Spain (MEED 28:12:01).

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