Oman’s OQ Gas Networks Prepares for Record-Breaking Initial Public Offering

Oman’s OQ Gas Networks Prepares for Record-Breaking Initial Public Offering

OQ Gas Networks (OQGN), the pipeline subsidiary of Oman’s state oil corporation, OQ, recently announced an initial public offering (IPO) that could potentially raise up to 297 million rials (approximately US$772 million) if priced at the top range. This IPO could be Oman’s largest in nearly two decades, offering about 2.12 billion shares, equivalent to up to 49% of OQGN’s share capital. This IPO could value the company at 606 million rials.

Oman is following the lead of its neighboring countries, Abu Dhabi and Saudi Arabia, in selling stakes in its energy assets to attract foreign investors, leveraging the rebound in crude oil prices. OQGN, the exclusive operator of Oman’s gas transport system, supplied natural gas to various sectors, operating a pipeline network that spanned nearly 4031km as of the end of 2022.

IPO Pricing and Details

The shares for institutional investors are priced between 131 and 140 Omani baisas per share, equivalent to 0.131 (US$0.34) and 0.140 rials (US$0.36), while those for retail investors are priced at 126 baisas per share. The anticipated proceeds and valuation slightly exceed earlier calculations as the retail discount is discretionary and not factored into the official figures.

Three anchor investors, Saudi Omani Investment Company, Falcon Investments, and Fluxys International, have each committed to taking 10% of the offering at the top end of the range. Earlier in March 2023, Abraj Energy Services, OQ’s oil drilling business, raised US$244 million with the sale of a 49% stake.

Timeline for Trading

The IPO subscription period is set to begin at the end of September 2023, with shares expected to start trading on the Muscat stock exchange around 24 October, after OQGN reveals the final price on 12 October.

Implications for the Region

This significant move by OQGN is in line with a growing trend among Gulf economies, which are increasingly looking to monetize their energy assets. Oman’s decision to follow in the footsteps of countries like Saudi Arabia and Abu Dhabi signifies a broader regional shift towards diversification and attracting foreign investment.

As the exclusive operator of Oman’s gas transport system, OQGN plays a crucial role in the country’s energy sector, supplying natural gas to power plants, free zones, industrial clusters, and LNG complexes. This IPO provides investors with a unique opportunity to gain exposure to Oman’s critical energy infrastructure.