Regional LNG: Three Japanese firms to buy Oman LNG

Mitsubishi Corp, Japan's biggest trading house, said Thursday it will sign a 15-year term contract to buy liquefied natural gas (LNG) from Oman, with the aim of exporting the fuel to the United States, the world's biggest energy user, gulfNews reported.

Itochu Corp and Osaka Gas Co also said they had signed long-term deals to buy LNG from Oman.

Mitsubishi, which will finalise the deal with Oman's Qalhat LNG today, plans to buy 800,000 tonnes per year starting in 2006, the company said in a statement.

"We are mainly looking at the US market," a Mitsubishi spokesman said.

Mitsubishi intends to extend its global LNG trading business to the United States, where LNG demand is expected to grow rapidly, the company said.

US LNG imports are expected to rise to 99 million tonnes a year by 2025 from 11 million tonnes in 2003, according to Asean Centre for Energy. LNG accounts for about two per cent of US natural gas consumption at present.

Increased demand for electricity in the US is lifting demand for LNG to fuel new generating capacity.

Mitsubishi also plans to build and start operating a $400 million LNG terminal on the US West Coast by 2008.

Oman's state-run Qalhat LNG plans to start commercial production by January 2006.

The company will have the capacity to produce about 3.7 million tonnes a year, making it the second biggest LNG project in Oman after Oman LNG.

Spain's Union Fenosa also has a long-term contract to buy 1.6 million tonnes per year from Qalhat LNG, Mitsubishi's statement said.

Itochu, Japan's third-biggest trading house, said it would buy 700,000 tonnes per year from Qalhat LNG over 20 years starting in 2006.

The company plans to trade LNG to tap into rising global demand for the fuel, the company said in a statement.

Osaka Gas, Japan's second biggest gas distributor to local customers, would buy 800,000 tonnes of LNG per year from Qalhat LNG over 17 years starting in 2009, it said in a statement.(*)