OQBI advances methanol expansion study in Oman

MUSCAT, SEPT 29
OQ Base Industries (OQBI) is proceeding with detailed studies for a proposed expansion of its methanol plant as the company evaluates a range of financing options for future growth projects, senior executives said.
The expansion, initially disclosed in the company’s initial public offering prospectus, remains under technical and operational assessment, Acting Chief Executive Officer and Chief Operating Officer Ihsan al Jandal said during a presentation on OQBI’s first-half performance.
“We are still conducting detailed studies for the methanol plant expansion project, and any developments will be disclosed in due course,” Al Jandal said.
Chief Financial Officer Ahmed al Baraami said the financing structure for future projects would depend on their size, feasibility and practical requirements.
The available options include direct project loans, other capital-market issuances and Islamic sukuk, he said, adding that they had been studied internally on a preliminary basis.
“The financing market is currently favourable, opportunities are available and the options are diverse,” Al Baraami said. Management would select and announce the most appropriate financing option once an expansion project was ready, he added.
OQBI’s methanol plant, which began operating in 2010, produced 595,000 tonnes during the six months ended June, compared with 602,000 tonnes in the corresponding period of 2025. Its next comprehensive maintenance turnaround is planned for 2028.
Ammonia production increased to 181,000 tonnes from 179,000 tonnes, while liquefied petroleum gas output declined to 151,000 tonnes from 175,000 tonnes following a 29-day scheduled maintenance shutdown.
Al Jandal said the lower LPG output resulted from the planned turnaround rather than operational difficulties. The company has no further scheduled maintenance shutdowns during 2026, and its plants are currently operating at full capacity, with operational performance exceeding expectations.
Total sales volumes increased 2.6 per cent to 940,000 tonnes from 916,000 tonnes a year earlier. Ammonia sales rose by approximately 9 per cent, while methanol sales increased 2.2 per cent, helping offset the decline in LPG sales caused by the shutdown.
Average selling prices during the first half were about $660 per tonne for LPG products, including propane, butane and condensates; $350 per tonne for methanol; and close to $600 per tonne for ammonia.
OQBI recorded first-half earnings before interest, taxes, depreciation and amortisation of RO 70.6 million, an increase of 56.3 per cent from a year earlier. Second-quarter EBITDA rose approximately 129 per cent year on year, mainly because of higher international product prices.
The company intends to distribute RO 26.9 million to shareholders in October, comprising a RO 18-million base dividend and a proposed RO 8.9-million performance-linked payment. The distributions remain subject to shareholder approval.
A further RO 18 million covering the second half of 2026 is planned for April 2027, subject to economic conditions, board decisions and the necessary shareholder approvals.
Al Baraami said OQBI remained exposed to fluctuations in international commodity prices but used long-term trading arrangements to help manage changing market conditions.