meed-logo

line1 line2 line3
SIGN IN / REGISTER

Oman diversifies hydrocarbons value chain

17 December 2023

Oman’s efforts to diversify its hydrocarbons value chain and derive more economic benefits from it are gaining traction.

State energy conglomerate OQ is pushing ahead with oil and gas projects aligned with its Oman Vision 2040 goals of achieving energy security, increasing revenues for the sultanate, and expanding its business portfolio into new energy frontiers such as hydrogen.

Oman aims to become a leading green hydrogen hub, producing 1 million tonnes a year (t/y) of green hydrogen by 2030 and 8.5 million t/y by 2050. Achieving this will require a total capital expenditure budget of $140bn, with a further investment of $230bn to unlock the hydrogen export economy.

While Muscat takes steps to establish a thriving green hydrogen ecosystem, OQ and its partners are also moving forward with plans to realise the sultanate’s blue hydrogen potential.

Hydrogen foray

OQ Gas Networks (OQGN), a subsidiary of OQ, is understood to be making progress with a project to build a cross-country hydrogen transport pipeline network, following its initial public offering (IPO) and listing on the Muscat Stock Exchange in October.

“While most discussion surrounds green hydrogen, there is also the potential for blue hydrogen production … which would provide additional long-term support to gas flows through the natural gas transportation network (NGTN) and is increasingly likely given the probable surplus upstream gas capacity,” OQGN said in its IPO prospectus.

“Blending hydrogen into gas streams could be an interim strategy to kickstart hydrogen production before demand is sufficient to justify investments in dedicated hydrogen pipelines,” the company added.

To that end, OQGN commissioned a feasibility study in 2022 to assess how much hydrogen could be introduced into the NGTN “before adverse effects would be noticeable and too expensive to mitigate”.

The company is understood to have advanced the study in 2023, and is expected to firm up the project’s engineering, procurement and construction tendering schedule in 2024.

OQGN also signed a memorandum of understanding with Belgium-based energy infrastructure company Fluxys International in October to jointly explore cooperation in developing hydrogen and carbon-capture projects in Oman.

Separately, the UK/Dutch Shell is studying the prospect of establishing a blue hydrogen and blue ammonia production facility in Oman, according to a local media report.

The company is considering Duqm, located in the southeast of the sultanate on its Arabian Sea coastline, as the location for the proposed project.

Shell is understood to be collaborating with the majority state-owned Petroleum Development Oman (PDO) for the planned blue hydrogen and blue ammonia production complex.

Through the project, Shell intends to tap into the recovery and storage of carbon dioxide discharged from its operations, while PDO plans to produce blue hydrogen.

Oman’s Energy & Minerals Ministry is supporting Shell in its study of the technical and commercial feasibility of the project, according to the report.

Raising upstream capacity

Maintaining oil and gas production capacity in the long term continues to be a priority for Oman.

In November, OQ awarded Canada-based Enerflex the main contract for a project to expand the production potential of the Bisat oil field in the sultanate. Enerflex will undertake the project, estimated to be valued at $200m, on a design, build, own, operate and maintain (DBOOM) basis.

The project represents the latest expansion phase of the Bisat oil field, situated in central Oman’s Block 60 hydrocarbons concession. Discovered in 2017, the Bisat oil field consists of about 165 oil wells and three crude oil processing plants.

The first crude oil processing plant at the field started operations in August 2019 and the second began running in September 2021. The third plant was commissioned on a trial basis in November 2022.

OQ raised production at the Bisat oil field from 5,000 barrels a day (b/d) in 2019 to 55,000 b/d by the third quarter of 2022. This is understood to be the fastest annual growth in oil field production in the Middle East. 

In January 2023, OQ announced that the Bisat oil field development had attained a production milestone of 60,000 b/d.

Gas production project

The majority state-owned PDO is preparing to issue the main tender for a project to build an integrated facility to produce gas from the Budour and Tayseer fields in 2024.

The project aims to expand the capacity of the existing gas production and processing facility at Tayseer. It represents the second development phase of the gas field. PDO also seeks to appraise, produce and process sweet gas from the Budour field, about 50 kilometres west of the Tayseer field.

PDO intends to appoint a contractor to deliver the combined Budour-Tayseer sour gas processing facility project on a DBOOM basis. It is projected to have a capacity of 78.39 million cubic feet a day (cf/d) and 1,167 cubic metres a day (cm/d) of unstabilised condensate.

The facility will handle gas exports of about 70 million cf/d and stabilised condensate exports of 950 cm/d, with a water handling capacity of 340 cm/d.

MEED's January 2024 special report on Oman also includes:

> ECONOMY: Muscat performs tricky budget balancing act 
> BANKING: Omani banks look to projects for growth
> POWER & WATER: Oman expands grid connectivity

https://image.digitalinsightresearch.in/uploads/NewsArticle/11360957/main2307.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Firms submit Jebel Ali sewage PPP prequalifications

    24 July 2026

     

    Dubai Municipality received statements of qualification on 23 July from firms interested in delivering phase three of the Jebel Ali sewage treatment plant (STP) expansion project.

    Known as DS150/3, the project will be delivered under a public-private partnership (PPP) model on a design, build, finance, own, operate and transfer basis.

    The project involves the development of a new water resource recovery facility with an ultimate treatment capacity of up to 1 million cubic metres a day (cm/d).

    It is being procured through Dubai Municipality’s sewerage and recycled water projects department and will be delivered via a two-stage operational approach over a 30-year concession period.

    It is understood that the following firms are among those likely to qualify for the project:

    • Acciona (Spain)
    • Alkhorayef (Saudi Arabia)
    • Besix (Belgium)
    • Etihad WE (UAE)
    • GS Inima (Spain)
    • Metito (UAE)
    • Miahona (Saudi Arabia) 
    • Samsung E&A (South Korea)
    • Saur (France)
    • Suez (France)
    • Taqa Water Solutions (UAE)
    • Veolia (France)

    The municipality issued a request for qualifications notice in May with an intial bid submission deadline of 18 June. UK-headquartered Deloitte is acting as financial adviser, Aecom is the project's technical adviser and CMS is the legal adviser.

    Dubai Municipality said the project will also include additional land uses and community-focused amenities as part of broader sustainability and urban integration objectives.

    Phase one and two expansion

    On 9 July, firms submitted bids for an engineering, procurement and construction contract covering the expansion of the Jebel Ali STP phases one and two.

    Located on a 670-hectare site in Jebel Ali, the original wastewater facility has a treatment capacity of about 675,000 cm/d, following the completion of phase two in 2019, combining approximately 300,000 cm/d from phase one and 375,000 cm/d from phase two.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cm/d, with the expansion estimated to cost $300m.

    UK-headquartered KPMG and UAE-based Tribe Infrastructure are serving as financial advisers on the project.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17735401/main.jpg
    Mark Dowdall
  • Contractors submit interest for Riyadh Expo substructure

    24 July 2026

     

    Contractors have submitted expressions of interest on 23 July for a contract to deliver the early works and substructure works for several assets at the Expo 2030 Riyadh site.

    Expo 2030 Riyadh Company (ERC) is tasked with delivering the Expo 2030 Riyadh venue. Saudi sovereign wealth vehicle, the Public Investment Fund, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for the event.

    The assets include the Icon; the convention centre; and thematic pavilions, including the Culture of Wisdom, Place & Planet and Adaptation & Innovation pavilions.

    The Icon will be located at the entrance of the Expo 2030 Riyadh site, within the Collaboration Precinct.

    The structure will be connected to the metro station and will serve as a gateway to the event.

    It will be 66 metres tall and will comprise an observation platform, food and beverage (F&B) outlets and other features.

    The convention centre will cover about 22,000 square metres. It will be the first point of arrival for visitors to the expo.

    The Culture of Wisdom pavilion will be a 25-metre-tall building that will feature exhibition galleries, innovation laboratories and conference and learning spaces.

    The Place & Planet building will also be 25 metres tall, and will include indoor and outdoor exhibition spaces, F&B and retail facilities and support areas.

    The Adaptation & Innovation pavilion will be located within the Loop of Nations precinct and will comprise a 29-metre-tall building.

    Construction progress

    The tendering of the pavilion structures followed progress on the site’s infrastructure development works.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners. That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems, and electric vehicle charging stations.

    The overall infrastructure works – covering the construction of main utilities and civil works at Expo 2030 Riyadh – are split into three packages:

    • Lot 1 covers the main utilities corridor;
    • Lot 2 includes the northern cluster of the Nature Corridor;
    • Lot 3 comprises the southern cluster of the Nature Corridor. 

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739044/main.jpg
    Yasir Iqbal
  • Oil price rises above $100 a barrel after Red Sea attacks

    24 July 2026

    Oil prices rose to their highest level in nearly two months on 23 July after the latest escalation in the US-Iran conflict threatened severe new disruptions to global energy supplies.

    Global benchmark Brent crude closed 7% higher, at $100.69 a barrel on 23 July. Earlier in the trading day, it rose as high as $102 a barrel. That is its highest level in eight weeks, since the end of May.

    Brent was trading at over $100 a barrel in the early hours of 24 July, but later pared gains to settle around $99.63 a barrel as of 11am Gulf Standard Time (GST).

    The surge in the Brent price came after Iran-backed Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea following their announcement of a naval blockade on Saudi Arabia.

    It appeared to be the first time since the regional war began that attacks on oil tankers and other commercial ships had extended beyond the Strait of Hormuz, opening up a new front in the volatile conflict.

    The Houthi threat is unsettling to oil markets because millions of barrels a day pass through the Bab El-Mandeb Strait to reach global markets.

    ALSO READ: Opec+ holds the line on unwinding of production cuts

    About 12%-15% of global maritime trade, worth more than $1tn, transits the waterway every year.

    It has also served as an alternative to the Strait of Hormuz, where traffic remains largely at a standstill, with ship crossings falling to single digits on 21 July.

    Since the start of July, oil prices have risen about 35%. Those prices are more than 60% higher than at the start of the year. This has erased much of the progress made in bringing prices down after the US and Iran signed a memorandum of understanding in mid-June.

    The interim peace deal has now collapsed, with US President Donald Trump threatening on 22 July to blow up an Iranian bridge or power plant for every vessel Tehran attacks.

    This was followed by the Houthi claim to have hit two tankers in the Red Sea.

    The UK’s Maritime Trade Office reported a tanker “struck by an unknown projectile” north of the Bab El-Mandeb Strait, and state-run Saudi Press Agency (Spa) reported that a vessel named Encelia was set ablaze by an attack while it was sailing overnight in the Red Sea, citing an unidentified source from the General Authority of Transport. Spa did not mention the other vessel, which is understood to be called Layla.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739553/main4051.jpg
    Indrajit Sen
  • Qiddiya tenders Dragon Ball theme park package

    24 July 2026

     

    Qiddiya Investment Company (QIC) has tendered a contract to undertake the back-of-house works on the Dragon Ball theme park in Qiddiya, Saudi Arabia.

    The scope covers the construction of plant rooms, facilities management buildings, workshops, storage warehouses and central processing kitchens.

    It also includes a monorail service depot, a fire station, parking, utilities and other associated infrastructure.

    The bid submission deadline is 13 September.

    The Dragon Ball theme park will cover more than 500,000 square metres and will have seven themed zones inspired by the Japanese media franchise, including Kame House, Capsule Corporation and Beerus’ Planet.

    The park will offer more than 30 rides with five main attractions, including a rollercoaster that passes through a 70-metre landmark based on the series’ wish-granting dragon Shenron. 

    The development will also include themed hotels.

    In September 2024, US-based firm Falcon’s Creative Group announced that it is undertaking the masterplan and attraction design and is the creative lead for the theme park.

    QIC formally launched the Dragon Ball theme park in March 2024.

    The announcement came after QIC signed an agreement with Japanese firm Toei Animation, the producer of the Dragon Ball anime series.

    The Dragon Ball theme park is one of several major projects within the wider Qiddiya development. Other projects include an e-games arena, Prince Mohammed Bin Salman Stadium, a horse racing venue, a performing arts centre, the Speed Park and Six Flags theme parks and Aquarabia waterpark.

    The project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom. According to UK analytics firm GlobalData, leisure tourism in Saudi Arabia has experienced significant growth in recent years.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17738622/main.jpg
    Yasir Iqbal
  • Saudi Arabia appoints developer for hybrid power plant

    24 July 2026

     

    Saudi Arabia-based Lamar Holding has signed a contract to develop a hybrid power plant at the Empty Quarter (Rub Al-Khali) land port in Saudi Arabia, according to a source.

    The public-private partnership (PPP) project aims to reduce diesel fuel use with renewable energy and ensure a long-term power supply at the Empty Quarter land port. It includes the construction of 15MW of total hybrid installed capacity, installation of a 7 megawatt-peak solar photovoltaic system and eight 1MW internal combustion engines.

    In March, MEED exclusively reported that Lamar had been given preferred bidder status and was in advanced discussions with Saudi Arabia’s Zakat, Tax & Customs Authority (Zatca) for the contract.

    MEED understands that the proposed plant will have the capacity to produce 25 gigawatt-hours of electricity annually. It will be implemented under a design, build, finance, operate, maintain and transfer contract model for 25 years, excluding the construction period.

    US/India-based Synergy Consulting is acting as financial advisor to Lamar on the project. Egyptian firm Eternal Consultation Engineering Services is acting as the technical support consultant and Dubai-headquartered Aktech is the technical consultant for the project.

    Lamar Holding and Dubai’s SirajPower submitted bids for the Empty Quarter hybrid power plant project in July 2025, as previously reported by MEED.

    Zatca, in collaboration with the National Centre for Privatisation & PPP, had previously prequalified the following four companies to bid for the contract in October 2024:

    • Alfanar Company (Saudi Arabia)
    • Lamar Holding (Saudi Arabia)
    • Olayan Energy (Saudi Arabia) / Enerwhere Sustainable Energy (UAE)
    • Siraj Power for Renewable Energy (UAE)

    Prior to that, in July 2024, 12 Saudi companies and local branches of international companies, along with 11 overseas-based companies, submitted statements of qualifications for the contract.

    In addition to building and operating the power plant, the project scope includes ensuring the facility operates to defined requirements and output specifications. It also involves managing power generation and the connection to the Zatca interface point for the entire project term.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17733327/main.jpg
    Mark Dowdall