Integrated Gas Co. seals major deals worth over OMR3.4bn to fortify national energy strategy

03/11/2025 03:46 AST

In a strategic move to bolster Oman's energy infrastructure, the Integrated Gas Company has finalised 19 strategic gas agreements and memoranda of understanding (MoUs) with local and international firms. The signings, held on Sunday under the patronage of Sultan bin Salim Al Habsi, Minister of Finance, are designed to optimise the nation's gas value chain and ensure the sustainable stewardship of its natural gas resources.

The comprehensive package includes 14 gas sales agreements valued at over OMR3.4 billion, which are expected to catalyse more than OMR2 billion in new capital investments. The company also secured three strategic gas purchase agreements with key producers; Occidental Oman (in concession areas 62 and 65) and Energy Development Company (in concession area 6). Supplemental memoranda of understanding were inked with OQ Group affiliates, covering the Duqm Petrochemical Complex and OQ Alternative Energy signalling a cohesive approach to energy development. The deals represent a significant international vote of confidence, with partnerships spanning India, China, the United States, France, and Kuwait.

Dr. Musallam bin Mahad Qatan, Chairman of the Board of Directors of the Integrated Gas Company, Director General of Revenues at the Ministry of Finance, emphasised that the Integrated Gas Company executes the government's mandated gas allocation policy and a strategic framework for managing producer-investor contracts. "These agreements, strategically dispersed across industrial hubs in Duqm, Sohar, Salalah, Nizwa, and Sur, are engineered to amplify local value addition and industrial competitiveness nationwide," Dr. Musallam stated. "This initiative underscores a shared public-private commitment to an economic model founded on partnership and the optimal utilisation of our national resources, in direct support of overall development targets."

He further highlighted the contracts' focus on enhancing In-Country Value (ICV) by integrating local producers, service providers, and logistics firms into the project ecosystems. The government's transparent auction mechanism for gas volumes exceeding one million cubic meters per day, he noted, demonstrates Oman's readiness to attract further industrial and manufacturing investments in line with Oman Vision 2040.

Echoing this sentiment, Abdulrahman bin Humaid Al Yahyai, Chief Executive Officer (CEO) of the Integrated Gas Company, characterised the signings as a "watershed moment" for both the company and Oman's gas sector. "This achievement bolsters investor confidence across the entire gas value chain and will incentivise greater international investment in exploration and production," Al Yahyai said. He projected that upon full operationalisation of the contracted projects, end-user gas allocation would surge to over 27.9 million cubic metres per day, reinforcing national energy security, fostering sustainable industrial growth, and advancing economic diversification objectives in accordance with targets of Oman Vision 2040.

Al Yahyai also outlined the environmental rationale, noting the dual strategy of using gas as a primary industrial fuel while committing to a future transition to alternative energy and hydrogen. The agreements also promote the capture and productive use of associated gas, eliminating flaring during oil production and creating synergies between gas-based feedstock and utility consumers.

Ashraf bin Hamad Al Mamari, Chief Executive Officer (CEO) of OQ Group, elaborated that the Group has finalised a suite of agreements with the Integrated Gas Company. This portfolio includes an upstream supply agreement with OQ Exploration and Production to provide gas feedstock for the Group's downstream projects, a dedicated agreement for a Natural Gas Liquids (NGL) extraction unit that will enable the establishment of advanced industries in Duqm, an agreement with OQ Alternative Energy focused on industrial transformation, and an extension of the existing agreement with the Oman India Fertilizer Company (OMIFCO). Al Mamari emphasized that these agreements are a direct outcome of the synergistic and integrated nature of the Group's diverse business operations.

He highlighted that the most significant projects covered under these agreements include Block 65 for upstream operations and a new Natural Gas Liquids (NGL) extraction unit for downstream development, along with a ten-year extension to the existing agreement with the Oman India Fertilizer Company (OMIFCO).

Mansour bin Ali Al Abdali, Chief Executive Officer (CEO) of OQ Gas Networks, stated that these agreements will facilitate the connection of both gas suppliers and consumers to the OQ Gas Networks infrastructure. He emphasised that the network's nationwide reach, extending from the far north to the far south of the Sultanate of Oman, confirms its robust capacity to handle the projected volumes. Al Abdali guaranteed a gas supply reliability rate of 99.9 percent, affirming that the quantities will be sufficient to fully meet the demands of the domestic market.

Eng. Dawood bin Salim Al Hadabi, Chief Executive Officer (CEO) of the Public Establishment for Industrial Estates "Madayn," explained that the agreements with the Integrated Gas Company are part of a collaborative strategy to cultivate a compelling investment climate. This is achieved by securing a reliable supply of natural gas for factories across several of Madayn's industrial cities, ensuring operational continuity under the highest technical standards. This initiative, he noted, is crucial for supporting existing industrial operations, fostering the growth of current investments, and attracting and localising new ventures within Oman.

Al Hadabi further elaborated that the revision of gas allocation schedules and pricing, the introduction of new terms governing minimum purchase commitments and volume recovery mechanisms-concurrently linked to mandated "Omanisation" targets for beneficiary companies-along with the rescheduling of gas allocations for a portfolio of existing factories, collectively underscore Madayn's commitment to industrial sustainability. This comprehensive approach is designed to reduce dependence on oil revenues, enhance In-Country Value (ICV), elevate employment rates, improve the efficiency of natural resource utilization in industrial development, increase the sector's contribution to the Gross Domestic Product, and deepen private sector involvement in the nation's economic and social development, thereby achieving the core objectives of Oman Vision 2040.

The Integrated Gas Company was established in December 2022 pursuant to a ministerial decision from the Ministry of Finance. The company's mandate encompasses the oversight of Oman's entire gas system, which includes the efficient management of contracts, the optimization of resource allocation, and ensuring effective financial and operational flows. It is also tasked with formulating strategies and policies for the gas sector, all aimed at securing sustainable returns and maximizing the economic value of the nation's natural resources.

The signing ceremony was attended by major producers, industrial partners, and representatives from leading Omani companies operating in the energy, petrochemicals, cement, metals, healthcare, and manufacturing sectors.

Times of Oman