MUSCAT: Integrated Gas Company (IGC), Oman’s state-mandated natural gas aggregator and shipper, is launching an auction to allocate gas for compressed natural gas (CNG) projects, opening a new route for supplying industries and other eligible users beyond the country’s pipeline network.
The initiative will make designated natural gas volumes available to qualified operators to develop and operate CNG projects across the Sultanate of Oman, according to details released by IGC. The company said the auction link and timetable would be announced once finalised.
Under the proposed framework, each bidder may request a maximum daily allocation of 200,000 standard cubic metres (SCM) of natural gas, with bids stating the required volume in SCM per day and its energy equivalent in MMBtu/day.
IGC has identified Sohar, Muscat, Ibri, Duqm and Salalah as indicative locations, although sites and connection points have not been finalised. Bidders will be required to propose a CNG facility location and suitable connection point on the OQ Gas Networks (OQGN) grid. These will be subject to independent technical due diligence, available network capacity, regulatory approvals and confirmation through OQGN’s connection process.
The initiative is designed to extend natural gas availability to industrial and other suitable consumers that are not directly connected to the pipeline grid, while offering greater flexibility to sites without permanent gas-supply infrastructure. It could also enable natural gas to substitute diesel and liquefied petroleum gas in appropriate applications, supporting lower-carbon fuel use.
“Natural gas should not stop where the pipeline ends,” IGC said in announcing the initiative, adding that the programme is intended to unlock private-sector investment, broaden access to gas and generate greater in-country value.
Successful bidders will assume full responsibility from award onwards for financing, developing, building, operating and maintaining their CNG facilities, including compression, storage, transportation and unloading infrastructure. They must also secure land, permits and approvals, establish the OQGN grid connection, secure customer offtake and execute the applicable Natural Gas Supply Agreement.
Crucially, gas allocated under the scheme will be restricted to the local market and CNG production. IGC said export or resale of the natural gas, power generation and uses outside the approved scope would be prohibited.
The auction represents a further evolution of IGC’s approach to gas allocation and market flexibility. Established in December 2022, the company manages gas allocations and the purchase, sale and transportation of natural gas on behalf of the Omani government, with gas allocation and industrialisation among its formal mandates.
IGC has also been progressively introducing more flexible allocation mechanisms. Oman’s Spot Gas Market, launched in 2024, expanded from one agreement that year to 13 in 2025, while 17 new spot-gas agreements were signed with industrial customers in the first half of 2026 alone, spanning sectors including cement, steel and food.
The CNG auction potentially takes that strategy a step further by using road-transportable compressed gas to bridge the physical gap between Oman’s national gas grid and industrial demand centres beyond the pipeline network.
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