MUSCAT: A competitive bidding process now applies to all requests for natural gas allocations above a certain threshold under a new framework adopted by the Integrated Gas Company (IGC), the sole aggregator and supplier of natural gas in the Sultanate of Oman.

According to IGC Chief Executive Officer Eng Abdul Rahman al Yahyaei, the framework aligns the wholly state-owned company with its mandate to maximise government revenue, support economic diversification, enhance efficiency and decarbonisation, drive job creation, generate in-country value (ICV), and foster market development.

Crucially, the new framework also introduces, for the first time, a transparent and rational basis for gas pricing—an approach that has boosted confidence among industrial end users and investors, he noted in an interview with The Energy Year, a UK-based global news platform.

“Any allocation exceeding 1 mcm (35.3 MMcf) per day over five years must now go through a competitive tendering and bidding process,” Eng Al Yahyaei said. “IGC has already conducted two tenders: the first for green steel production, resulting in conditional allocations to Jindal Steel Duqm, Mitsui, Kobe Steel and Meranti Green Steel—a consortium producing DRI in Duqm. The second tender, for fertilisers, led to a conditional allocation to Al Shaafi Holding. These tenders have provided valuable insights into price points and term preferences across applicants.”

The new bidding mechanism stems from a series of reforms undertaken by IGC beginning in 2024. These reforms enabled the launch of Oman’s first gas spot market in 2024 and introduced new terms to natural gas sales agreements (NGSAs), including take-or-pay clauses, excess-gas pricing and other revenue-protection measures.

IGC has also completed a comprehensive price-indexation study covering the fertiliser, methanol, cement and steel industries to determine minimum and cap pricing levels, alongside advancing several digitalisation initiatives. 

Supporting economic growth and diversification, IGC recently signed agreements allocating gas to the fertiliser, petrochemical, pharmaceutical, food-processing and mining sectors—effectively doubling the volume of gas dedicated to Oman’s industrial development. In total, the company has concluded 19 agreements comprising three gas purchase agreements with producers, 14 NGSAs with industrial end users and two MoUs with key stakeholders, collectively accounting for around 27 mcm (953 MMcf) per day.

Asked how IGC balances supply between traditional consumers and emerging industrial clusters at Duqm, Sohar and Salalah, the CEO said the company prioritises ensuring uninterrupted supply to existing businesses. At the same time, he emphasised that IGC evaluates and supports new industries based on gas efficiency and their alignment with energy-transition goals. “The objective is to attract and enable industries that consume less gas, operate with lower emissions, and can progressively transition to alternative energy sources such as green hydrogen and other cleaner fuels,” he stated.

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