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LNG goals galvanise Oman’s oil and gas sector

3 December 2025

 

The Omani oil and gas sector, where large-scale, capital-intensive project investments are relatively rare, has been bolstered by progress on two major liquefied natural gas (LNG) developments.

The government made headlines in July last year when it announced that majority state-owned Oman LNG would build a fourth train at its Qalhat LNG production complex in Sur.

The new LNG train will have an output capacity of 3.8 million tonnes a year (t/y), increasing Oman LNG’s total capacity to 15.2 million t/y when it is commissioned in 2029.

Oman LNG has recently made key progress on the expansion project, having shortlisted three bidders for the main engineering, procurement and construction (EPC) contract: a consortium of Chiyoda and South Korea’s Samsung C&T; Japanese contractor JGC Corporation; and a consortium comprising Italy’s Saipem and South Korea’s Daewoo Engineering & Construction.

Technical and commercial bids are due in February and March 2026, respectively. The EPC tender process began less than a year after Oman LNG awarded the front-end engineering and design (feed) contract to US-based consultancy KBR.

Separately, France’s TotalEnergies is studying a potential expansion of its Marsa LNG bunkering and export terminal in Oman. The move is significant, given that the first phase of the project is currently under construction in the sultanate’s northern industrial city of Sohar and will have an output capacity of 1 million t/y.

TotalEnergies reportedly began an initial study on a potential second phase earlier this year. The French energy major may consider doubling the LNG complex’s capacity, although the plan has yet to be confirmed, according to sources.

Earlier in the year, TotalEnergies appointed Technip Energies – already the main EPC contractor on the under-construction Marsa LNG terminal – to perform concept and feasibility studies on the proposed expansion phase.

With Oman LNG advancing its fourth train and TotalEnergies assessing a potential doubling of LNG output, the sultanate is positioning itself to become a major global LNG player by 2030.

Upstream pursuits

Petroleum Development Oman (PDO), meanwhile, continues to advance projects aimed at maintaining and enhancing the sultanate’s oil and gas production capacity.

PDO operates Block 6, Oman’s largest and most prolific hydrocarbons concession, spanning 75,119 square kilometres onshore and containing 202 oil fields and 43 gas fields.

The government holds a 60% stake in PDO, with the remaining shares held by UK-based Shell (34%), France’s TotalEnergies (4%) and Thailand’s PTTEP (2%).

In September, PDO awarded the main contract for an integrated project to produce natural gas from the Budour and Tayseer fields. The project aims to expand the capacity of existing gas production and processing facilities at Tayseer as part of the field’s second development phase. PDO will also appraise, produce and process sweet gas from the Budour field, located about 50 kilometres west of Tayseer.

Kuwait-based Spetco International Petroleum Company won the design, build, own, operate and maintain (DBOOM) contract for the combined Budour-Tayseer sour gas processing facility.

PDO has also launched a solicitation of interest with contractors for feed work on the second phase of a project to increase oil production from the Rabab Harweel field in Oman’s southernmost Dhofar Governorate.

PDO began production from the asset in 2019 following completion of the estimated $3bn Rabab Harweel Integrated Project (RHIP), on which UK-based Petrofac carried out the EPC works.

The second tranche of the RHIP is an enhanced oil recovery project that involves raising miscible gas injection in additional reservoirs across several smaller fields within the wider development. Scheduled to come on-stream beginning in 2028, tranche two aims to expand oil production capacity and improve gas injection by utilising ullage at the existing Harweel Main Production Station (HMPS).

The scope also includes sustaining condensate and gas supply by using ullage from the first phase of RHIP, installing a depletion compression facility by 2030, and expanding the off-plot gas supply network.

According to the request for information document, PDO has yet to decide on the project execution model, with the majority state-owned company considering a feed-to-EPC approach. The scope of work on the RHIP tranche two project is primarily divided into an oil and a gas scope.

Separately, PDO has begun prequalification for EPC works to develop key on-plot facilities as part of the early phase development of the Dhulaima onshore field.

The Dhulaima Upper Shuaiba field, located in the Lekhwair cluster within Block 6, will be developed under an operations lease contract with a duration of five years.

The project’s scope covers EPC activities and all associated civil, mechanical, piping, electrical, fabrication, instrumentation, control, testing, pre-commissioning, commissioning and de-commissioning works.

PDO has also launched a prequalification exercise for a considerable scheme to appoint one or more contractors to build early production facilities for new appraisal exploration fields, enabling accelerated production and early monetisation.

Boosting the energy value chain

State energy conglomerate OQ Group is moving ahead with initiatives to expand natural gas liquids (NGL) production capacity, in line with trends across the Gulf’s national oil companies.

OQ has launched prequalification for feed works on a project to build an NGL extraction facility in Saih Nihayda in central Oman, which will send condensates to Duqm for fractionation and export.

Separately, Oman Tank Terminal Company (OTTCO), an OQ subsidiary, and Netherlands-based Royal Vopak signed a shareholder agreement in November to establish a new company in the Special Economic Zone at Duqm (Sezad).

OTTCO will hold a 51% stake and Vopak the remaining 49%, with the new company set to develop and operate world-class energy storage and terminal infrastructure at Duqm.

In addition, Energy Development Oman (EDO) has entered into a joint venture with Japan’s Sumitomo Corporation to establish a supply chain management company in the sultanate.

The entity – set to be the first of its kind in Oman – will be based in Duqm, located in Al-Wusta Governorate on the sultanate’s geopolitically strategic Indian Ocean coast.

The new company aims to provide supply chain management services to Oman’s energy sector, beginning with oil country tubular goods and later expanding to other products and services across the hydrocarbons value chain, renewables and other energy segments.

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Indrajit Sen

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