Integrated
Gas Company Seals Major Deals Worth over RO 3.4 Billion to Fortify National
Energy Strategy

Muscat,
2 Nov (ONA) — In a strategic move to bolster Oman’s energy infrastructure,
the Integrated Gas Company has finalized 19 strategic gas agreements and
memoranda of understanding (MoUs) with local and international firms. The
signings, held today under the patronage of Sultan bin Salim Al Habsi, Minister
of Finance, are designed to optimize 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 RO 3.4
billion, which are expected to catalyze more than RO 2 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,
emphasized 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 utilization 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, characterized 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 incentivize
greater international investment in exploration and production,” Al Yahyai
said. He projected that upon full operationalization of the contracted
projects, end-user gas allocation would surge to over 27.9 million cubic meters
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 finalized 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 emphasized 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 localizing 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
“Omanization” 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.

—
Ends/Khalid