Japan lauds Oman as a reliable energy partner

MUSCAT: Japan has welcomed expanding energy cooperation with the Sultanate of Oman spanning not only conventional hydrocarbons, chiefly liquefied natural gas (LNG), but also the emerging clean energy sector.

The affirmatory remarks were made by Yoshimasa Hayashi, Japanese Minister for Foreign Affairs, during a brief meeting with Sayyid Badr bin Hamad al Busaidi, Oman’s Foreign Minister, on the margins of the Japan-Australia-India-US (Quad) Foreign Ministers’ meeting that was held in the Indian capital, New Delhi, on March 3, 2023.

According to a statement issued by the Japanese Ministry of Foreign Affairs, Hayashi hailed the steadily expanding bilateral relationship between the two countries, which had marked the 50th anniversary of the establishment of diplomatic relations last year. He voiced hope that the broadening relationship would further develop across a wider range of areas, notably the energy sector under the banner of the Comprehensive Partnership between Japan and Oman.

In particular, Hayashi described as “extremely important” the stable supply of LNG from Oman, which has been a “reliable partner for Japan for many years”, the statement noted.

“The two Ministers concurred to promote further cooperation in the field of clean energy, such as renewable energy, hydrogen, and ammonia, in addition to the traditional energy sector,” it further added.

In recent months, energy cooperation between the two countries has witnessed a strong uptick. In December, majority state-owned Oman LNG announced the signing of binding sheet agreements with three Japanese firms for the delivery of LNG, starting in 2025. ITOCHU Corporation, JERA Co Inc and Mitsui & Co, Ltd have become the latest beneficiaries of Omani LNG covering a total of 2.35 million metric tonnes per annum (mtpa) of LNG.

The agreements build on the existing robust partnership between Oman and Japan, where Japan has been a critical market for Oman’s LNG for the last 22 years. The new agreements will see Oman LNG supplying Japan with a total volume of 2.35 mtpa based on contracts varying from 5 to 10 years. Supply commitments are as follows: ITOCHU Corporation, 0.8 MTPA, JERA Co Inc 0.8 MTPA, and Mitsui & Co, 0.75 MTPA.

That same week, Oman signed an MoU with the Japanese Ministry of Economy, Trade and Industry to explore cooperation in the field of hydrogen, fuel ammonia and carbon recycling that includes methanation. The pact aims to accelerate the Oman-Japan energy and resources cooperation and acknowledge the continued role and contribution of the Sultanate of Oman to Japan’s energy security.

The two sides also signed the third extension of the MoU signed between Oman and Japan Organization for Metals and Energy Security in the field of crude energy, natural gas and clean energy.

Japan currently ranks among Oman’s largest trade partners. Bilateral trade amounted to $4.6 billion in value for the ten months ending October 2022, with Omani exports – comprising mainly hydrocarbons - accounting for an outsize share of around $3 billion of the total. Imports from Japan – constituting automotive vehicles, ships and machinery – totaled around $938 million during this period.