The government is considering the possibility of merging Oman LNG and Qalhat LNG in order to reduce costs and boost Oman's LNG brand worldwide.
Currently operting as separate companies, the merger would bring the two together under a single identity. Oman LNG was formed in 1994 to run two gas liquefaction trains at its Sur plant and Qalhat LNG was formed in 2003 to run the plant's third train.
Dr Brian Buckley, CEO of Oman LNG, told Muscat Daily that the proposal "is currently at the 'ideas' stage" and shareholders have been given 'preliminary evaluations,' prior to further discussions.
He said, "The government of Oman has approached the shareholders of the two companies on the possibility of merging the management of the two companies. There have been some preliminary evaluations of this proposal that are now being considered by the shareholders of Oman LNG and Qalhat LNG."
Dr Buckley added that although the exact benefits 'have yet to be quantified' - this will form part of the shareholders' initial discussions - the merger could present 'a more united face' to potential LNG customers.
He said, "The government has expressed its interest in identifying potential synergies in such a merger, such as reducing costs and presenting a more united LNG face to the outside world."
Despite the potential upheaval involved in bringing the two companies together,
Dr Buckley explained that current agreements with importers will remain unaffected by any potential merger.
He said, "The government and the two companies have given assurances to the existing buyers of LNG from Oman that any merger of the management of the two companies will in no way affect the commitments made under their long-term sales and purchase agreements with Oman LNG and Qalhat LNG."
Major long-term overseas buyers of Oman LNG's gas are Korea Gas Corporation, Osaka Gas of Japan and Itochu Corporation. Overseas buyers from Qalhat LNG include Spain's Union Fenosa Gas, Mitsubishi Corp and Osaka Gas.
Oman-France tax treaty amended
Muscat - The Omani and French governments signed on Sunday an annex to the amendment on avoidance of double taxation and tax evasion in the income tax agreement that the two countries signed in 1989.
The annex was signed on behalf of the sultanate by H E Darwish al Balushi, Minister Responsible for Financial Affairs, and on behalf of the French government by the charge d'affaires at the French Embassy in Muscat.
H E Balushi said that according to this annex, some of the articles contained in the 1989 agreement have been changed to meet alterations to the tax laws of the two countries.
He added that among the important articles of the annex are the possibility of imposing of seven per cent source discount on royalty and the introduction of a new article about tax information exchange between the two countries.
© Muscat Daily 2012
