MUSCAT: Ahead of the anticipated start of construction work on Marsa LNG’s bunkering terminal at Sohar Port in the Sultanate of Oman, the joint venture partners are targeting the completion of negotiations on the financing of the project before the end of Q3 2024.
Marsa LNG – a joint venture between TotalEnergies (with an 80 per cent working interest) and Omani integrated energy group OQ (with a 20 per cent working interest) – is overseeing the development of a 1 million metric tonnes per annum (mmta) capacity plant at Sohar Port. LNG output from the facility will be supplied to ships as a low carbon alternative to marine bunker fuel currently used to power most ships globally.
According to wholly Omani government-owned OQ, the construction of the LNG plant will be financed through a subordinated loan from the joint venture partners and a drawdown under a US$500 million bank loan to be provided to Marsa by a syndicate of Omani, regional and international banks.
“In connection therewith, US$100 million and US$400 million of the facility is expected to be support guaranteed by the Company (OQ Exploration & Production - OQEP) and TotalEnergies, respectively, with each being liable pursuant to their respective support guarantees for any drawdowns on a pro rata basis,” OQEP revealed in the prospective of its upcoming Initial Public Offering (IPO).
“The Company (OQEP) expects to complete the negotiation of, and to execute, the final form of facility documentation by the end of September 2024, and for Marsa to make an initial drawdown thereunder during the fourth quarter of 2024,” it added.
OQEP – the upstream arm of OQ - made the revelations in a prospectus published ahead of the launch of its Initial Public Offering (IPO) covering 25 per cent of its capital for public subscription on the Muscat Stock Exchange (MSX) starting later this month.
OQEP also holds a 13.4 per cent working interest in Block 10, a gas and condensate asset in central Oman, that will provide natural gas as feedstock for Marsa LNG. Shell holds a 53.5 per cent working interest, with the Marsa LNG JV holding a 33.2 per cent working interest. In addition, through OQEP’s 20 per cent ownership interest in Marsa LNG, it has an indirect 6.6 per cent working interest which it acquired simultaneously with its direct stake, giving it an aggregate working interest of 20 per cent in Block 10.
French engineering and technology firm Technip Energies has been awarded the contract to build the Marsa LNG train on an Engineering, Procurement and Construction (EPC) basis. The plant is expected to be operational in 2028.
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