Oman plans IPO of gas transport operator

Muscat Securities Market

• OQGN selling 49% of share capital
• Listing on MSX in October
• OMR33m dividend due in January 2024

Oman’s natural gas transportation network operator OQ Gas Networks (OQGN) is planning to sell up to 49 percent of its share capital through an IPO.

The subscription, subject to regulatory approvals from the sultanate’s Capital Market Authority, will commence this month and be open to all qualified investors. The listing on the Muscat Securities Market is set to take place in October. 

The Gulf’s state oil company OQ will continue to hold 51 percent in OQGN.

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OQGN as a listed entity said it plans to have a semi-annual dividend distribution policy.

A first dividend of OMR33 million for the first nine months of 2023 is expected to be paid next January, and the second dividend of OMR11 million in April 2024.

The offering is sharia compliant. Its size was not disclosed immediately, but it is expected to be the biggest IPO in the sultanate in almost two decades and could raise $700 million to $800 million. 

As an exclusive operator and owner of the National Gas Transportation Network, OQGN supplies natural gas to power plants, free zones, industrial groups, liquefied natural gas complexes and other customers. 

Its assets are worth an estimated $2.5 billion, and comprise gas pipelines, gas supply stations, and other facilities distributed across the sultanate. 

It also owns and operates the Sultanate’s 4,000 km long gas pipeline grid.

Mansoor al Abdali, managing director of OQGN, said in a press statement that the listing would move the company into the next chapter of growth.

“The core focus of OQGN will remain unchanged, focusing on the delivery of vital resources supporting the growth of our customers and the sultanate of Oman,” he said.

AGBI reported OQGN’s plans for a full or partial privatisation last May.

OQGN’s gas network IPO will be the second in Oman this year, following the floatation of OQ’s oil and gas drilling business, Abraj Energy Services. This raised $244 million in March and was 8.7 times oversubscribed.

Oman’s larger strategy and divestment programme is being managed by the Oman Investment Authority, the sultanate’s integrated sovereign wealth fund, according to Talal al Awfi, OQ Group CEO and OQGN chairman.

OQGN is among several subsidiaries indirectly owned by the sovereign Oman Investment Authority.