Oman’s OQ Gas Networks set to raise up to $771 million in IPO

Saudi Omani Investment Company, Qatar Investment Authority subsidiary Falcon Investments and Fluxys Belgium are each taking 10 per cent of the offer

OQGN holds a natural monopoly over Oman's natural gas transport infrastructure. Source: Oman News Agency

Oman’s OQ Gas Networks, the pipeline business of state oil company OQ, aims to raise up to 297 million Omani riyals ($771 million) from its initial public offering in what could be the country's largest listing.

OQ set the price range for the IPO of OQGN at 131 baisas to 140 baisas per share, which would give the company a valuation of up to 606 million riyals ($1.57 billion), according to a statement on the Capital Market Authority's website on Sunday.

The state-run company is selling about 2 billion shares, representing a 49 per cent stake in OQGN through Oman Energy Trading Company and Oman Oil Services Limited.

Saudi Omani Investment Company, a unit of the Public Investment Fund, as well as Qatar Investment Authority subsidiary Falcon Investments and gas infrastructure company Fluxys Belgium, are each taking 10 per cent of the offer, OQGN said in a separate statement on Monday.

The offer is the “largest in the history of the Omani capital market in terms of volume and market value”, the CMA statement said.

The book-building period will run from September 26 until October 9 for institutional investors, while the retail offer is expected to close on October 5.

OQGN's shares are expected to commence trading on the Muscat Stock Exchange on October 24.

“The company’s high cash flow visibility, underpinned by a robust regulatory environment and experienced leadership team were critical in determining our investment,” said Muteb Al Shathri, acting chief executive of the Saudi Omani Investment Company.

“We have confidence in OQGN’s development and trajectory, as well as in Oman as an attractive investment destination.”

The company holds a natural monopoly over Oman's natural gas transport infrastructure and is the exclusive owner and operator of the company’s natural gas transportation network.

The network involves a system of pipelines, metering facilities, compressor stations, gas supply stations and block-valve stations.

Last year, the company transported 39.4 billion cubic metres of gas from six producers to about 130 consumers through 4,031km of pipelines, supported by three compressor stations and 25 supply stations.

OQGN reported a more than 41 per cent rise in its first-half profit to 33.1 million riyals as total income grew 16.5 per cent to 85 million riyals.

OQGN is set to be the second IPO from its parent company OQ amid Oman’s privatisation programme as the Gulf region’s smallest oil producer continues to focus on the diversification of its economy.

In March, OQ floated its oil-drilling unit Abraj Energy Services after raising $244 million in what was Oman’s biggest listing in more than a decade.

OQ, which is owned by the Oman Investment Authority, intends to privatise several assets in the coming five years, Mansoor Al Abdali, OQGN’s managing director told The National in an interview this month.

OQGN aims to expand its business and enter into hydrogen and “be a player in the CCUS [carbon capture, utilisation and storage]”, he said. It signed a preliminary agreement to “position the company as an infrastructure player for transportation of hydrogen,” he added.

There has been an IPO boom in the Middle East, with a number of companies listing their shares on regional stock markets such as the Abu Dhabi Securities Exchange, the Dubai Financial Market and Saudi Arabia’s Tadawul as economies recover from the coronavirus-induced slowdown on the back of higher oil prices and government reforms.

Middle East IPOs raised more than $23 billion in 2022 from 48 listings, compared with $7.52 billion from 20 offerings in the previous year.

That was the highest share for the Gulf region after 2019 when Saudi Aramco went public in a $29 billion offering, the world’s largest.