Sharjah National Oil Corporation (SNOC) has put on hold its floating Liquefied Natural Gas (LNG) storage terminal at Hamriyah Port in the emirate of Sharjah, the company CEO said on Tuesday.
Hatem Al Mosa confirmed during an online media roundtable that the project had been put on hold while SNOC completes the evaluation of the size of the natural gas and condensate reserves at the Mahani onshore field in Sharjah.
In January this year, SNOC and its partner Eni had announced the successful discovery of Mahani field, the first onshore Sharjah discovery in 37 years.
“We have decided to put the project on hold until we understand the size of the Mahani [discovery]… and future gas discoveries,” he said, adding that buying LNG under 10-year contracts is not right in the current scenario.
He also confirmed that SNOC had reached an advanced stage of negotiations with LNG suppliers after completing FEED [Front End Engineering Design], EPC [Engineering, Procurement, Construction] and FSU [Floating Storage Unit] stages and securing of gas supply contracts.
Zawya Projects had reported in August 2019 that SNOC was likely to award the LNG project’s EPC package in the same quarter.
Al Mosa said he didn’t expect the novel coronavirus outbreak (COVID-19) to impact SNOC’s future projects.
“Covid-19 is a short-term problem for the next few months. It won’t have an impact on our long-term projects,” he said, adding that the oil market cannot sustain the current low prices.
“Covid-19 is a temporary setback for the world. In six months, we will be back to above $50 a barrel [as] the oil market cannot sustain these prices,” he said.
Brent crude oil price has slumped to less than $30 per barrel in March due to decline in demand caused by the coronavirus outbreak and strict containment efforts by governments worldwide and the sudden removal of supply limitation measures instituted by OPEC and other oil-producing nations, according to past reports by Reuters.
Earlier on Tuesday, SNOC announced that it had awarded the UAE’s second gas storage project.
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