Wednesday, February 6, 2008

Oman to start importing gas in July

Breaking news. Oman will start importing Gas this year.

A couple of my colleagues in another Ministry - the Ministry of Oil and Gas - told me that Oman will finally start importing Gas from Qatar, via the UAE pipeline, around July this year. The gas pipeline to the UAE was built a few years ago to enable Oman to supply gas to a power station in Dubai while they waited for the gas to arrive from Qatar. It also enabled the pipe to be laid ostensibly to export gas from Oman, even though everyone knew it would be the source of imports eventually (and a careful reading of official releases makes that clear).

Imports will be around 5.2 million m3/d, equivalent to some 8% of Oman's current gas demand. What they wouldn't tell me is the price. I'll dig into that and report soon. What will be interesting is to compare the price for the imported gas with the prices given to the Sohar and Salalah Gas based industries. It will certainly be a lot less than the Government gets from the LNG plants at Sur. But it will emphasise the true subsidy the new industries are receiving.

How is Oman getting the gas at all, and why? A ha! Both good questions reader. I'll explain that once I sort out the price thing. It's a long story. And not all bad news for Oman.

Also to come this week, the strange story of the Methanol plant in Salalah and how the Government seems ready to subsidise it's gas even more than they are already!

The Dragon


  1. This comment has been removed by a blog administrator.

  2. Where did the gas go?

    The only viable option is Iran which is willing to supply Oman with massive quantities of gas at low prices which would continue to make all these projects in Sohar viable. Instead we are going to buy it from Qatar and then sell it cheap to the industries. Why?

    By the way, this is actual gas, not LNG. It doesn't come from the LNG plants in Sur to the factories in Sohar.

  3. When I get around to it, I'll try to explain based on what I hear from my friends in the MOG...

    But I fully agree the best option for big, long term gas (not so sure about the 'cheap' part) is Iran. [Because after all, they'll be generating electricity using nuclear power even though they have masses of gas and gas turbines would be loads cheaper...]


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