MUSCAT: OQ Gas Networks (OQGN), the exclusive operator of Oman’s gas transportation system, has reported a new record in gas delivery, which hit an all-time high of 131 million standard cubic metres/day (mmscmd) during the month of June 2024.

The announcement came in a report of the publicly traded company’s financial performance for the first half of 2024. OQGN – a subsidiary of state-owned integrated energy group OQ – listed on the Muscat Stock Exchange (MSX) last October following a record-breaking public subscription.

The uptick in gas supply underscores increased growth in demand for natural gas to support the energy needs of a burgeoning economy fuelled by intensifying industrial and petrochemicals activities, the surging needs of residential air-conditioning amid a particularly severe summer, and general organic growth.

It also comes amid an expansion of OQGN’s gas transportation system following the commissioning of the South Grid project in August this year, aimed at boosting gas supply to Dhofar Governorate. Dubbed the ‘Saib Project’, it added 177km of pipeline capacity from Harweel to Raysut Station in Salalah, helping boost the capacity of the South Grid to 16 mmscmd, up from 10 mmscmd – an increase of 60 per cent.

Following the addition of the pipeline, the total length of OQGN’s national gas transportation system climbed to 4,223 kilometres, up from 4031 kilometres previously. Furthermore, gas transported by OQGN across its national network climbed to a total of 21.2 billion cubic meters (bcm) in the first half of 2024, up from 19.4 bcm during the corresponding half of 2023.

“The company financial performance for the first half of 2024 exceeded the business plan. Beside financials, the operational results have also been exceptional, especially with the commencement of Price Control 3 (2024-2027) supported by the operational growth and excellence,” OQGN stated in its financial report for H1 2024.

However, revenue dipped 4.9 per cent to RO 80.8 million during the first half of this year, down from RO 85 million a year earlier. Total expenditure was up 2.3 per cent to RO 53.1 million, up from RO 51.9 million in H1 2023. Profit slumped 16.3 per cent to RO 27.7 million, down from RO 31.3 million in H1 2023.

Commenting on the financial results, the company stated: “OQGN’s financial results showed a slight decrease of RO 0.7 million in revenue mainly due to lower construction revenue. Net profits increased by RO 3.5 million compared to the same period in 2023 primarily due to increase in WACC (weighted average cost of capital) following commencement of Price Control 3. The variance in comparison to 2023 is attributable to one-off events resulting in reimbursement of PC2 (price control) opex allowance of RO 5.3 million in 2024, financial gains of RO 8.8 million from the termination of a hedge in 2023 and RO 5.4 million from the waiver of interest on a shareholder loan in 2023.”

Furthermore, in support of its sustainability goals - centring on the achievement of Net Zero by 2050 - OQGN announced the start of implementation of its decarbonization strategy. This encompasses initiatives related to the use of mobile recompression, flare recovery and the adoption of an Energy Management System, it added.

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