Amid a year hit hard by low international oil prices and weakened global LNG demand, Oman LNG saw revenue decline to $2.503 billion in 2020, down from $3.845 billion a year earlier. Net Income After Tax (NIAT) slumped to $663 million last year, down from $1.112 billion in 2019.
However, despite the formidable challenges posed by the pandemic-impacted global economy, Oman LNG delivered a “remarkable” performance overall, notably in terms of its production, reliability, and delivery of its strategic debottlenecking and power projects, top officials said.
“In its 20 years of operation, and despite the many challenges encountered over the years, our company has continued to contribute to Oman’s growth on an ever-expanding scale. By all measures of success, Oman LNG has sailed past all benchmarks to become the profitable and sustainable industry model that it is today,” Talal Hamid al Awfi, Chairman of the Board of Directors, stated in the company’s newly published 2020 Annual Report.
Majority-state-owned Oman LNG, said the Chairman, took early steps to mitigate the effects of collapsing oil prices and other adverse impacts on its production and financial obligations during the year. “To offset shortfalls, we proactively launched substantial cost saving initiatives, optimised shipping routes and revisited our market positioning. These initiatives successfully helped close the gaps and enabled us to remain agile and profitable.”
These efforts were reflected in Oman LNG’s success in delivering a total of 155 LNG cargoes (equivalent to 10.2 million tons of LNG) last year, versus 166 cargoes (10.6 million tonnes) in 2019. While the two trains belonging to Oman LNG contributed 114 of these cargoes, the remaining 41 came from the third train owned by Qalhat LNG. A further 32 cargoes of natural-gas liquids (NGLs) were also generated and shipped during the year.
Harib Abdullah al Kitani, who retired as CEO of Oman LNG at the end of 2020, noted that the revenue and NIAT for the year were lower only by 17 per cent from estimates set out in the Business Year for 2020.
He added: “Few companies would highlight their finances as a positive feature of 2020 business. There are times when protection of assets is sufficient success to celebrate, and although revenue and NIAT were down by 17 per cent for the year, much of this can be attributed to the collapse in oil prices, subsequently compounded by the economic effects of the pandemic. Seen in this light, we need not be dispirited. What is more, our OPEX cost-savings for 2020 were worth an impressive $45 million – no mean feat – all the more so given that our business operations suffered no hiccups.”
Among the highlights of the past year was the successful completion of the shutdown / turnaround of Train 1. Furthermore, the ongoing debottlenecking and power upgrade projects enabled the production of four additional LNG cargoes during the year as a result of the capacity increase and enhanced efficiency contributed by these initiatives.
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