MUSCAT: Oman's premier gas transportation operator, OQ Gas Networks (OQGN), has reported an unprecedented milestone in gas delivery, achieving a record high of 131 million standard cubic meters per day (mmscmd) during the month of June 2024.
This achievement was highlighted in a report detailing the financial performance of the publicly listed entity for the initial six months of the year. OQGN, a subsidiary of the state-owned integrated energy conglomerate OQ, was listed on the Muscat Stock Exchange (MSX) in October of last year, following a record-breaking public offering.
The increase in gas supply reflects a significant rise in demand for natural gas to meet the energy requirements of a rapidly expanding economy, driven by the intensification of industrial and petrochemical activities, the escalating demand for residential air conditioning during an exceptionally hot summer, and overall organic growth.
This surge in gas supply also coincides with the expansion of OQGN's gas transportation network, following the inauguration of the South Grid project in August of this year. This project, known as the ‘Saib Project,’ extended the pipeline capacity from Harweel to Raysut Station in Salalah by 177 kilometers, thereby increasing the capacity of the South Grid from 10 mmscmd to 16 mmscmd, marking a 60 per cent increase.
Following the completion of this project, the total length of OQGN's national gas transportation system has risen to 4,223 kilometers, an increase from the previous figure of 4031 kilometers. Moreover, the volume of gas transported across OQGN's national network has risen to 21.2 billion cubic meters (bcm) in the first half of 2024, surpassing the 19.4 bcm recorded in the corresponding period of 2023.
"The company's financial performance for the first half of 2024 surpassed the business plan, with operational results also demonstrating exceptional performance, particularly with the commencement of Price Control 3 (2024-2027), supported by operational growth and excellence," OQGN stated in its financial report for the first half of 2024.
However, it should be noted that revenue decreased by 4.9 per cent to RO 80.8 million during the first half of this year, a decline from the previous year's figure of RO 85 million. Total expenditure increased by 2.3 per cent to RO 53.1 million, an increase from the previous year's expenditure of RO 51.9 million. Consequently, profit fell by 16.3 per cent to RO 27.7 million, a decrease from the previous year's profit of RO 31.3 million.
In response to the financial outcomes, the corporation disclosed, "OQGN's financial performance witnessed a minor decline in revenue, attributed primarily to a reduction in construction-related income. However, net profits experienced a notable increase of 3.5 million compared to the preceding year, 2023, primarily attributed to a rise in the Weighted Average Cost of Capital (WACC) following the initiation of Price Control 3. The deviation from the previous year's figures can be attributed to one-time events, including the reimbursement of PC2 (price control) operational expenses of 5.3 million in 2024, financial benefits of 8.8 million from the termination of a hedge in 2023, and 5.4 million from the waiver of interest on a shareholder loan in 2023."
Moreover, in alignment with its sustainability objectives, which focus on achieving Net Zero emissions by 2050, OQGN announced the commencement of its decarbonization strategy. This strategy includes initiatives aimed at the utilization of mobile recompression, flare recovery, and the implementation of an Energy Management System, as further elaborated.
