Oman’s new gas entity assumes role as shipper in place of MEM
Published: 01:10 PM,Oct 02,2023 | EDITED : 05:10 PM,Oct 02,2023
OQ Gas Networks owns and operates the 4,000km long natural gas transportation system of the Sultanate of Oman.
MUSCAT: The wholly state-owned Integrated Gas Company (IGC), established last December to manage gas sales and purchase arrangements on behalf of the Omani government, is in the process of assuming the role of the country’s sole shipper of gas – a prerogative hitherto held by the Ministry of Energy and Minerals (MEM).
Set up as a state-owned enterprise under the auspices of the Ministry of Finance, IGC represents the government’s interests in the management of all allocations, assets, rights and obligations of natural gas purchase, sales, transport, imports and exports, as well as all relevant products. The entity is also tasked with contributing to Oman’s fiscal performance by shouldering all expenses related to gas purchase and transport from the State Budget. Part of its remit is to transfer net gas revenue to the treasury as well.
As part of this broader mandate, the Integrated Gas Company is also donning the role of ‘shipper’ – a responsibility encompassing primarily the management of gas sales and purchases on behalf of the government. The Ministry, which held this responsibility until recently, oversaw the business of purchasing gas from producers and supplying it to consumers via the Natural Gas Transmission Network (NGTN) owned and operated by OQ Gas Networks (OQGN).
“The transition from MEM to IGC is still being implemented in practice and IGC will take on the Shipper role from the MEM in a phased manner during 2023,” according to OQGN, which is currently in the midst of an Initial Public Offering (IPO) ahead of its planned listing on the Muscat Stock Exchange (MSX).
Notably, given the rapidly evolving energy landscape here in Oman and globally as well, additional shippers could be licensed in the future – a move designed to encourage further investment in the country’s hydrocarbon industry. Potential candidates could likely include international exploration and production companies that have exploration and production sharing agreements (EPSAs) and Gas Sales Agreements (GSAs) with the government.
“There are ongoing discussions between (OQGN) and one of these companies, which may result in additional Shippers being added in the future after required regulatory and other approvals to accommodate a multi-shipper regime in Oman,” the gas transporter – part of OQ Group - revealed recently.
To enable IGC to discharge its new responsibility as shipper in place of the Ministry, OQGN said it has signed an “operational support services agreement” with the former to facilitate the transition phase.
OQGN is the monopoly owner and operator of the Natural Gas Transportation Network (NGTN), which transported a total of 39.4 billion cubic meters (BCM) of gas during 2022. These volumes, sourced from six gas producers, were supplied to a diverse consumer base comprising around 130 gas consumers through a countrywide pipeline networks of over 4,000 kilometers.
Set up as a state-owned enterprise under the auspices of the Ministry of Finance, IGC represents the government’s interests in the management of all allocations, assets, rights and obligations of natural gas purchase, sales, transport, imports and exports, as well as all relevant products. The entity is also tasked with contributing to Oman’s fiscal performance by shouldering all expenses related to gas purchase and transport from the State Budget. Part of its remit is to transfer net gas revenue to the treasury as well.
As part of this broader mandate, the Integrated Gas Company is also donning the role of ‘shipper’ – a responsibility encompassing primarily the management of gas sales and purchases on behalf of the government. The Ministry, which held this responsibility until recently, oversaw the business of purchasing gas from producers and supplying it to consumers via the Natural Gas Transmission Network (NGTN) owned and operated by OQ Gas Networks (OQGN).
“The transition from MEM to IGC is still being implemented in practice and IGC will take on the Shipper role from the MEM in a phased manner during 2023,” according to OQGN, which is currently in the midst of an Initial Public Offering (IPO) ahead of its planned listing on the Muscat Stock Exchange (MSX).
Notably, given the rapidly evolving energy landscape here in Oman and globally as well, additional shippers could be licensed in the future – a move designed to encourage further investment in the country’s hydrocarbon industry. Potential candidates could likely include international exploration and production companies that have exploration and production sharing agreements (EPSAs) and Gas Sales Agreements (GSAs) with the government.
“There are ongoing discussions between (OQGN) and one of these companies, which may result in additional Shippers being added in the future after required regulatory and other approvals to accommodate a multi-shipper regime in Oman,” the gas transporter – part of OQ Group - revealed recently.
To enable IGC to discharge its new responsibility as shipper in place of the Ministry, OQGN said it has signed an “operational support services agreement” with the former to facilitate the transition phase.
OQGN is the monopoly owner and operator of the Natural Gas Transportation Network (NGTN), which transported a total of 39.4 billion cubic meters (BCM) of gas during 2022. These volumes, sourced from six gas producers, were supplied to a diverse consumer base comprising around 130 gas consumers through a countrywide pipeline networks of over 4,000 kilometers.