Oman well-placed to become synthetic LNG producer: Shell

MUSCAT, JULY 18

Energy major Shell sees the Sultanate of Oman to be ideally positioned to emerge as a producer and exporter of Synthetic LNG – a carbon-neutral alternative to natural gas with the same properties of fossil LNG.

According to a top official of the energy giant’s Oman subsidiary, the presence of well-established gas networks, liquefaction terminal and export infrastructure, coupled with a strong and expansive global customer base, bodes well for the growth of a Synthetic LNG industry in the country.

“Several countries and important parts of the global gas customer base are looking at synthetic LNG as a possible way to decarbonise power and industrial sectors as it avoids the sometimes prohibitive costs of repurposing production facilities, receiving terminals or pipelines, and all those infrastructures are already present in Oman,” said Walid Hadi, Senior Vice-President and Country Chair of Oman Shell.

“We expect the highest demand to materialise from Europe and the Far East and eventually, as technology evolves and costs of production decrease, it could soon become part of the world’s mainstream energy mix,” Hadi stated in an interview featured in The Energy Year, a UK-based energy news portal.

Earlier this year, Shell signed an agreement with Oman’s Ministry of Energy and Minerals to explore opportunities for the production of Liquefied Synthetic Gas (LSG) for the first time in Oman. LSG is produced when renewable hydrogen is combined with captured carbon dioxide to produce natural gas which is then liquefied.

This low-carbon gas can be directly introduced to existing gas networks and infrastructure, including the liquefied natural gas stations of the Oman LNG Company, all the way to the end user.

“This agreement represents a big step ahead because we believe that hydrogen produced in the country can be very competitive and that LSG could prove to be a commercially viable ‘plug and play’ low-carbon fuel. In reality, I believe we will need to develop multiple use cases and export vectors to be able to develop low-carbon hydrogen at scale and LSG could emerge as one of those leading export vectors,” said Hadi in the interview.

The Sultanate of Oman, he said, has been picked by Shell to become the first country in the world for the energy giant’s plans set up a commercial scale LSG project. “

Shell has conducted a few pilots around the world to develop this technology, and now we hope that we will be able to build the first plant in Oman,” he stated.

But given the steep cost of producing Synthetic LNG versus extraction of natural gas for fossil LNG, more guidelines and market signals would be imperative if this low-carbon alternative is to become commercial viable, Hadi stressed. He nevertheless expressed confidence that Oman is “moving in the right direction and that the necessary mechanisms will be implemented by 2030”.