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TotalEnergies Deploys a Multi-Energy Strategy from Oman to Malaysia

TotalEnergies CEO Patrick Pouyanné met with His Majesty Sultan Haitham bin Tariq Al Said and Minister of Energy HE Eng. Salim bin Nasser Al Aufi to reaffirm the long-term partnership between TotalEnergies and the Sultanate of Oman as well as launch the Marsa LNG Project during a meeting in Muscat this week.

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TotalEnergies CEO Patrick Pouyanné met with His Majesty Sultan Haitham bin Tariq Al Said and Minister of Energy HE Eng. Salim bin Nasser Al Aufi to reaffirm the long-term partnership between TotalEnergies and the Sultanate of Oman as well as launch the Marsa LNG Project during a meeting in Muscat this week.

TotalEnergies has signed a Sale and Purchase Agreement with Oman LNG to offtake 0.8 Mtpa of LNG for ten years from 2025, making the Company a main offtaker of Oman LNG’s production.

Following the meeting, Pouyanné and Chairman of Oman National Oil Company Mulham Basheer Al Jarf announced the Final Investment Decision of the Marsa LNG project.

TotalEnergies (49%) and OQ Alternative Energy (51%), have confirmed that they are continuing to advance discussions to jointly develop a portfolio of up to 800 MW, including the 300 MWp solar project that will supply Marsa LNG.

Their joint company Marsa Liquefied Natural Gas (“Marsa”), TotalEnergies (80%) and OQ (20%) will launch an integrated Marsa LNG project which comprises of the following:

Upstream gas production: 150 Mcf/d of natural gas, coming from the 33.19% interest held by Marsa in the Mabrouk North-East field on onshore Block 10, which will provide the required feedstock for the LNG plant. Block 10 production started in January 2023 and reached plateau in April 2024. The FID allows Marsa LNG to extend its rights in Block 10 until its term in 2050.

Downstream gas liquefaction: a 1 Mt/y capacity LNG liquefaction plant will be built in the port of Sohar. The LNG production is expected to start by first quarter 2028 and is primarily intended to serve the marine fuel market (LNG bunkering) in the Gulf. LNG quantities not sold as bunker fuel will be off-taken by TotalEnergies (80%) and OQ (20%); and

Renewable power generation: a dedicated 300 MWp PV solar plant will be built to cover 100% of the annual power consumption of the LNG plant, allowing a significant reduction in greenhouse gas emissions.

According to Pouyanné, the Marsa LNG plant will be 100% electrically driven and supplied with solar power, positioning the site as one of the lowest GHG emissions intensity LNG plants ever built worldwide, with a GHG intensity below 3 kg CO2e/boe. The average emission intensity of LNG plants is around 35 kg CO2e/boe – this represents a reduction in emissions of more than 90%.

“We are proud to open a new chapter in our history in the Sultanate of Oman with the launch of the Marsa LNG project, together with our partner OQ, demonstrating our long-term commitment to the country. We are especially pleased to deploy the two pillars of our transition strategy, LNG and renewables, and thus support the Sultanate on a new scale in the sustainable development of its energy resources. This very innovative project illustrates our pioneer spirit and showcases the relevance of our integrated multi-energy strategy, with the ambition of being a responsible player in the energy transition. By paving the way for the next generation of very low emission LNG plants, Marsa LNG is contributing to making gas a long-term transition energy,” says Pouyanné.

The main Engineering, Procurement and Construction contracts have been awarded to Technip Energies for the LNG plant and to CB&I for the 165,000 m3 LNG tank.

Pouyanné says that the Marsa LNG project will generate long-term employment opportunities and significant socio-economic benefits for the city of Sohar and the region.

According to Pouyanné the ambition of the Marsa LNG project is to serve as the first LNG bunkering hub in the Middle East, showcasing an available and competitive alternative marine fuel to reduce shipping industry emissions.

Compared to conventional marine fuel, TotalEnergies claims that LNG helps to cut greenhouse gas emissions by up to 23%, nitrogen oxide emissions by up to 85%, sulfur emissions by 99% and fine particle emissions by 99%. Marine LNG has the potential to reduce emissions significantly more if bio or synthetic LNG is used.

TotalEnergies says it has actively invested in LNG bunkering infrastructure, critical to supporting its shipping customers’ adoption of LNG as a marine fuel. The Company currently deploys three LNG bunker vessels: the Gas Agility at the Port of Rotterdam, Netherlands, the Gas Vitality at the Port of Marseille-Fos, France, and the Brassavola at the Port of Singapore.

TotalEnergies has been present in Oman since 1937. In the first quarter 2024, TotalEnergies’ production in Oman was 61 kboe/d. TotalEnergies produces oil in Block 6 (4%), natural gas in Block 10 (26.55% via Marsa LNG LLC) as well as LNG through its participation in the Oman LNG (5.54%)/Qalhat LNG (2.04% via Oman LNG) liquefaction complex with an overall capacity of 11.4 Mtpa. TotalEnergies is currently conducting exploration activities in Block 12 (50%, operator), and is appraising Block 11 (22.5%).

TotalEnergies claims to contribute to the development of renewables in the country, such as the largest solar photovoltaic system built to provide power for a desalination plant in Oman (17 MWp – 30,000 MWh/y), in a joint-venture with Veolia, which began commercial operation in April 2023.

In other news this week, TotalEnergies also signed an agreement with Sapura Upstream Assets Sdn Bhd (SUA) to acquire its 50% interest in Malaysian independent gas producer and operator SapuraOMV Upstream Sdn (SapuraOMV) for a consideration of USD 530 million, subject to closing adjustments. Closing is expected in the second half of 2024.

This agreement follows a first agreement signed with OMV on 31 January 2024, for the acquisition of its 50% interest in SapuraOMV.

After completion of both transactions, which are subject to some conditions precedent, in particular regulatory approvals, TotalEnergies would own 100% of SapuraOMV.

SapuraOMV’s main assets are its 40% operated interest in block SK408 and 30% operated interest in block SK310, both located offshore Sarawak in Malaysia.

In 2023, SapuraOMV’s operated production (100%) was about 500 Mcf/d of natural gas, feeding the Bintulu LNG plant operated by Petronas, as well as 7 kb/d of condensates. On block SK408, the development of Jerun gas field is on track for a startup in the second half of 2024.

SapuraOMV also holds interests in exploration licenses in Malaysia, Australia, New Zealand and Mexico, where a discovery was made in 2023 on block 30.

Commenting on the deal, Pouyanné says TotalEnergies will become 100% owner of SapuraOMV.

“Following the transaction with OMV announced two months ago and this new transaction with Sapura Upstream Assets, TotalEnergies will have full ownership of SapuraOMV and become a significant gas operator in Malaysia. The SapuraOMV assets are fully in line with our strategy to grow our gas production to meet demand growth, focusing our portfolio on low-cost and low-emission assets. We look forward to strengthening our global partnership with Petronas in Malaysia, a country where we see further development opportunities for our Company,” says Pouyanné.

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