(Bloomberg) -- TotalEnergies SE and Oman National Oil Co. will build a liquefied natural gas plant aimed at becoming the first hub serving the LNG marine fuel market in the Middle East.

The Marsa LNG project, 80%-owned by TotalEnergies and 20% by Oman’s OQ SAOC, includes upstream gas production, a 1 million-ton-per-year liquefaction plant to be built in the port of Sohar and a 300-megawatt solar plant to reduce the facility’s emissions, the French company said in a statement Monday.

“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,” TotalEnergies Chief Executive Officer Patrick Pouyanne said in the statement announcing the final investment decision.  

Using LNG as a marine fuel has been controversial. Although ships using LNG result in about 25% less carbon dioxide emissions than traditional marine fuels, older vessels often fail to burn all the methane. That means some of it leaks directly into the atmosphere where it can have a devastating climate impact.

The main engineering, procurement and construction contracts for the project have been awarded to Technip Energies NV for the LNG plant and to CB&I for the LNG tank, according to the statement. The “substantial” contract represents between €500 million ($533 million) and €1 billion of the firm’s revenue, Technip said.

LNG production is expected to start by the first quarter of 2028 and is primarily intended to serve the marine fuel market in the Gulf. TotalEnergies and OQ will take the volumes not sold as bunker fuel. 

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