Oman mulls ‘Unified Gas Buyer’ for power sector

MUSCAT, DEC 30

The Ministry of Energy and Minerals has revealed that it is studying the establishment of a ‘Unified Gas Buyer’ for Oman’s electricity sector, a move aimed at supporting the optimal and strategic use of the Sultanate of Oman’s natural gas resources as the energy transition gathers pace.

Natural gas currently accounts for around 90 per cent of Oman’s electricity generation, with renewables — primarily solar and wind — contributing the remaining 10 per cent. The renewable share is expected to rise to 30 per cent by 2030, in line with national decarbonisation targets, while Net Zero emissions are targeted by 2050.

To enable the efficient and sustainable integration of renewables into a system dominated by gas-fired generation, the Ministry is evaluating a suite of reforms designed to optimise gas use. The combined deployment of gas, solar and wind enhances power system flexibility and reduces overall reliance on fossil fuels, according to the Ministry.

In this context, “the establishment of a unified gas buyer for the electricity sector is being studied to improve planning and control of gas quantities allocated for generation, contributing to demand curve optimisation, gas consumption rationalisation and improved operational efficiency across the national system”, the Ministry said in its newly published newsletter, Wealth.

Energy experts describe the proposal as a potentially significant shift in market design. Currently, gas allocations to power producers are largely governed by long-term arrangements that can encourage baseload operation even when renewable generation is available. A unified gas buyer would centralise procurement and allocation, enabling more efficient dispatch, prioritising higher-efficiency plants and reducing gas burn during periods when solar, wind and storage can meet demand — particularly during evening peak hours.

Centralised gas procurement would also help curb inefficient consumption in the power sector, reduce exposure to excess take-or-pay commitments and potentially free up gas for higher-value uses such as industry, LNG, petrochemicals or export. In doing so, it would reinforce Oman’s broader energy transition objectives by ensuring gas is deployed in a more deliberate and economically strategic manner.

Beyond market reform, the Ministry has also highlighted parallel efforts to refine the gas demand curve for electricity production while prioritising land allocation for renewable energy projects based on rigorous technical and environmental criteria. Measures are also under way to optimise daily and seasonal gas demand by integrating energy storage into renewable plants, allowing the grid to be supported during peak periods and reducing reliance on gas-fired generation in the evenings.

Significantly, Oman is also exploring natural gas storage as part of its resource optimisation strategy. “Suitable geological formations are being assessed for underground gas storage to ensure supply flexibility and energy security during peak or emergency periods”, the Ministry said, adding that such an approach would enhance grid stability and reduce exposure to volatility in global gas markets.

To support innovation and ensure system readiness for advanced technologies, the Ministry is developing a regulatory sandbox that will allow controlled testing of solutions such as battery storage, pumped hydro and flexible loads ahead of commercial deployment. This framework is intended to strengthen market preparedness, encourage local innovation and accelerate the development of Omani capabilities in smart grids and energy storage.

“The integration of energy sources, improvements in gas efficiency, deployment of storage technologies and support for innovation together form a comprehensive system driving Oman’s transition towards a low-carbon future”, the Ministry concluded. “This transformation is not only an environmental imperative, but also an economic and strategic opportunity to build a more efficient, competitive and sustainable economy, positioning the Sultanate of Oman as a regional model in energy mix management and sustainability solutions”.