MUSCAT: Bids close on May 30, 2025, for Oman’s second spot sale of natural gas this year, organized by Integrated Gas Company (IGC) — the country’s sole aggregator and supplier of natural gas. The auction reflects Oman’s ongoing commitment to maximizing government revenues from this vital resource.

On offer in the current round is a supply of 75,000 MMBTUs per day of natural gas, available for a mutually negotiable term, extendable by a similar period, according to IGC CEO Abdulrahman bin Humaid Al Yahyaei.

Speaking to the Observer, Al Yahyaei noted that the latest auction is part of a broader series of competitive mechanisms introduced by IGC to enhance the value derived from natural gas.

“These platforms enable investors to compete beyond our baseline requirements, helping us secure optimal value for Oman. This approach aligns with our broader strategy of market-driven resource optimization and value creation,” he stated.

Launched less than a year ago, IGC’s spot gas auctions have already attracted significant interest, particularly from the industrial sector. The first auction of 2025 — offering 175,000 MMBTUs per day over a 1+1-year term — was the largest to date.

Commenting on market interest in that round, the CEO noted: “There was strong demand, particularly from existing industrial customers who already have agreements with IGC. These customers expressed interest in expanding their production capacity, which would require additional gas. The interest mainly came from the industrial sector, including petrochemical and other manufacturing operations.”

Significantly, these auctions have served as a valuable learning experience for both market participants and IGC — a wholly state-owned enterprise operating under the Ministry of Finance.

Abdulrahman bin Humaid al Yahyaei, CEO – IGC.

Customers are increasingly aware of the opportunities offered through this new approach and are becoming more familiar with the mechanisms behind spot gas transactions. This growing awareness is expected to improve future participation and deepen understanding of the strategic value of natural gas in Oman.

Explaining the variation in volumes offered in different rounds, Al Yahyaei said they depend on surplus gas availability during a given period, after accounting for long-term contractual commitments and new gas requests.

“Volumes offered in spot sales are determined by the amount of surplus gas available after fulfilling long-term obligations. Our ability to aggregate volumes is influenced by factors such as operational efficiency, unplanned plant shutdowns, seasonal demand fluctuations, and upstream supply conditions,” he said.

“We also take upstream supplier shutdowns into account. At the same time, some end-users may strategically schedule their own maintenance outages to either increase consumption before or after a shutdown, optimizing production and revenue.”

These market dynamics were also evident during IGC’s first spot sale in August 2024, which offered 15,000 m³/day of natural gas for a four-month term. That bid was won by Octal, a Salalah-based PET manufacturer.

Looking ahead, IGC plans to conduct spot gas auctions on a quarterly basis. An award for the current round is expected by June 30, 2025, subject to the submission of a successful bid.

“We look forward to continuing to engage the market and unlocking greater value through innovative gas commercialization strategies,” Al Yahyaei concluded.


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