Oman LNG prepays $2 bn loan in reflection of robust fiscals

MUSCAT, April 20 - Attesting to its strong financial credentials, Oman LNG has announced that it has successfully repaid its $2 billion loan facility obligation ahead of schedule, signalling a positive credit score for the Omani company while saving interest costs as well. The laudable achievement comes on the heels of sister-company Qalhat LNG’s similar announcement that it had successfully repaid its loan ahead of schedule — back-to-back milestones that underscore the financial stability of the LNG companies notwithstanding the current economic environment. Furthermore, in proactively settling their debt obligations well in advance, Oman LNG and Qalhat LNG exemplify the Omani government’s efforts to showcase the Sultanate’s investment appeal and sound macroeconomic underpinnings. Dr Mohammed bin Hamad al Rumhy, Minister of Oil and Gas, and Chairman of Oman LNG, commented, “The early repayment of the loan by Oman LNG demonstrates the financial robustness of the company and confidence in the Oil and Gas industry and Omani economy at large. The Oil and Gas industry provides a great investment opportunity like other sectors of the Omani economy.” The story of Oman LNG’s project finance started in 1997 when lenders granted a loan of $2 billion. It was billed as one of the largest limited recourse financings arranged in the Middle East as the gas liquefaction project was the largest venture undertaken by the Sultanate at that time, with strategic importance to the national economy. The project construction in Sur was completed ahead of schedule and under budget and started operations in the year 2000. Over the years, the company has witnessed a strong financial performance which enabled the company to make voluntary prepayments to its lenders and provide investors with increased confidence in the financial robustness of the company. This is in addition to the global reputation that the company has attained in the Liquefied Natural Gas (LNG) market since it started its operations in the year 2000. Harib al Kitani, Chief Executive Officer of Oman LNG said, “This success is a testament of our commitment to our lenders and all our stakeholders. It provides confidence to them about our financial robustness, hence their willingness to continue their relationship with the company and the country at large.” Al Kitani added: “The successful repayment of the loan will open a huge opportunity for more projects or expansion of this successful natural gas investment by the government and other shareholders.” Oman LNG has managed to repay its loan obligations in full, without default and ahead of schedule, hence rendering the company debt free. These efforts provide clear evidence to investors world-wide that Oman is a safe haven for investments and help the government’s ambitions to diversify the country’s economy and meet its 2040 vision through such healthy investment environment. LNG exports have become the largest income earner for the Sultanate after oil revenues. With its key buyers in Asia and Europe, Oman LNG has run efficiently and reliably since its start-up of operations where last year reached successfully a record high production rate of 10.4 million tonnes per annum (mtpa). Since the inception, over 2,400 cargoes of LNG have been safely and reliably produced and delivered to various destinations around the globe.