Oman’s OQGN signs $100m gas pipeline deal

Omani state-controlled OQ Gas Networks (OQGN) has signed a $100 million agreement to acquire a gas pipeline transportation network to fuel manufacturing industries in the country. 

OQGN signed the Asset Transfer Agreement with Oman’s ministry of energy and minerals for the 65km long gas transportation pipeline located in Block 61, the company said in an Omani bourse disclosure.  

Block 61 is located in central Oman in the Khazzan and Ghazeer fields with a daily production of 1.6 billion cubic feet. BP holds a 40 percent stake, while OQ Exploration & Production and Malaysia’s Petronas both hold 30 percent. 

“OQGN will use the gas from this pipeline to fuel manufacturing industries of chemicals, minerals and water desalination projects,” the ministry said in a statement to AGBI. 

Oman is working hard to diversify its economy away from crude oil dependency and manufacturing is part of its 2040 economic vision. 

However, the sultanate’s net oil revenue – total income after deducting costs – fell 13 percent year on year to OMR4.7 billion ($12.2 billion) between January and September, the state-run Oman News Agency reported last month, citing a quarterly bulletin from the finance ministry.

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OQGN, which owns and operates Oman’s 4,000km gas pipeline grid, is planning to expand its gas network by 20 percent at the end of 2027.  

Oman’s demand for natural gas is set to rise from new industrial projects that are expected to come online in the country’s free zones, OQGN CEO Mansoor Al Abdali said in a company report.

OQGN shares closed at OR.0192 on Wednesday, up 18 percent in the year to date.