Oman’s OQ Gas Networks Plans IPO, Aims to List on Muscat Stock Exchange

Oman’s OQ Gas Networks Plans IPO, Aims to List on Muscat Stock Exchange

Oman’s OQ Gas Networks (OQGN), the pipelines business unit of the state oil company OQ, is set to make a significant move in its growth trajectory. The company has unveiled plans to conduct an initial public offering (IPO) and list its shares on the Muscat Stock Exchange. This strategic decision aims to propel OQGN into the next phase of its development.

Subscription Period and Regulatory Approvals

The subscription period for the IPO will cater to qualified institutional investors and other stakeholders in various countries, along with retail investors in Oman. The commencement of this period is anticipated this month, pending regulatory approvals from the Capital Market Authority of the Sultanate of Oman, as announced by the company.

Offering Size and Focus

Although the company has not disclosed the size of the offering, it has outlined its commitment to maintaining its core focus on delivering essential resources to support the growth of its customers and the Sultanate of Oman.

OQGN’s IPO will allocate 70 percent of the total offering to eligible investors in Oman and qualified institutional investors across multiple countries. The remaining 30 percent will be reserved for retail investors.

Listing Timing

The listing of OQGN’s shares is projected to take place in October this year, marking a significant milestone for the company.

OQGN holds a pivotal position in Oman’s energy infrastructure, having a natural monopoly over the country’s natural gas transport infrastructure. This encompasses a comprehensive network of pipelines, metering facilities, compressor stations, gas supply stations, and block-valve stations.

Transporting Vital Resources

In 2022, OQGN transported a substantial 39.4 billion cubic meters of gas, connecting six gas producers with approximately 130 gas consumers through an extensive network spanning nearly 4,031 kilometers of pipelines. This infrastructure is further supported by three compressor stations and 25 supply stations.

Part of Oman’s Vision 2040

The IPO of OQGN is aligned with the broader divestment program initiated by the government and overseen by the Oman Investment Authority. This initiative contributes to Oman’s Vision 2040, a long-term national development plan aiming to enhance the country’s prosperity, competitiveness, and sustainability while diversifying its economy.

Dividend Distribution Policy

Following the IPO, OQGN plans to adopt a semi-annual dividend distribution policy to its shareholders. The first dividend, estimated at 33 million Omani rials ($86 million) for the first nine months of 2023, is expected around January 2024. Subsequently, the second dividend distribution, totaling 11 million rials for the last three months of 2023, is anticipated around April 2024.

OQGN reported impressive financial results, with a more than 41 percent increase in its first-half profit, reaching 33.1 million rials, as total income grew by 16.5 percent, amounting to 85 million rials.

Bank of America Securities, Bank Muscat, and EFG Hermes are jointly coordinating the IPO transaction, reflecting the significant interest and support from international financial institutions.

Middle East IPO Boom

The IPO announcement comes amid a notable IPO boom in the Middle East, as economies rebound from the COVID-19 pandemic’s impact. Several companies have listed their shares on regional stock markets, capitalizing on higher oil prices and government reforms. In 2022, Middle East IPOs raised more than $23 billion from 48 listings, marking a substantial increase compared to the previous year.

OQ Gas Networks’ IPO and listing represent a pivotal moment in the company’s journey and align with Oman’s long-term development goals. The offering provides an opportunity for both Omani and international investors to participate in the country’s ambitious Vision 2040 and its commitment to diversify the economy while enhancing prosperity and sustainability.