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OQGN gets approval for 193km gas transport pipeline

20 November 2024

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Oman’s OQ Gas Networks (OQGN) has said it has received regulatory approval to build a new 193-kilometre (km) loop line between Fahud and Sohar in the sultanate.

The Fahud-Sohar loop line project, which will feature a 42-inch gas transport pipeline, “is designed to bolster Oman’s natural gas infrastructure and support regional energy needs”, OQGN said in a filing with the Muscat Stock Exchange (MSX), where its shares started trading in October last year.

Scheduled for completion in 2027, the new pipeline will have a gas transport capacity of 9 million cubic metres a day.

OQGN, a subsidiary of Oman’s state-owned energy holding conglomerate OQ, manages a network of 4,045km of gas pipelines, along with three compressor stations at Fahud, Nimr and Buraimi, and 29 gas supply stations. The company delivers gas to 130 consumers, including power plants, desalination facilities and other industrial complexes.

In August, the company inaugurated a new 208km-long gas pipeline in Dhofar governorate. The project, known as Saib, increases the total size of OQGN’s natural gas transportation network (NGTN) to 4,258km, and raises its transport capacity by 60% from 10 million to 16 million cubic metres a day.

The new pipeline runs alongside an existing 24-inch pipeline in Dhofar in the southern part of the sultanate.

ALSO READ: OQ seeks to raise $490m from downstream products unit IPO

OQGN previously said it plans to increase the pipeline length to 4,222km in 2024, then to 4,287km in 2025, 4,344km in 2026 and 4,472km in 2027.

The firm expects network capacity to rise from 69.3 billion cubic metres in 2023 to 71.1 billion cubic metres in 2024, 77.1 billion cubic metres in 2025 and 2026, and 79.7 billion cubic metres by 2027.

Correspondingly, the volume of gas the pipelines transport is projected to increase from 40.5 billion cubic metres in 2023 to 41.7 billion cubic metres in 2024, 43 billion cubic metres in 2025, 44.3 billion cubic metres in 2026, and 45.6 billion cubic metres by 2027.

Parent entity OQ published details on OQGN’s current and upcoming projects in a prospectus released last October as part of its subsidiary’s initial public offering (IPO) exercise.

OQGN had been allocated a capex budget of $148m for 2023, while spending in the medium term has been set in the $600m-$750m range, OQ said in the IPO prospectus.

OQGN has also been tasked with pushing through several projects to expand its NGTN and improve connections with its consumers.

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Indrajit Sen

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