MUSCAT, OCT 2
OQ Gas Networks SAOG (OQGN) has established a $1 billion sukuk issuance programme, giving the company flexible access to international debt capital markets as it enters a major phase of investment in new gas transmission infrastructure.
In a disclosure to the Muscat Stock Exchange (MSX) dated October 1, QGN said no sukuk has yet been issued and no financing raised under the programme. Future issuances may be listed on the London Stock Exchange’s International Securities Market, subject to funding requirements, market conditions and relevant approvals.
The move effectively creates a ready financing platform that OQGN can tap when required, potentially diversifying its funding sources beyond bank lending while giving it access to the sizeable international and regional Islamic capital markets.
“The establishment of the Programme does not, in itself, result in any change to OQGN’s approved capital expenditure or business plan,” Eng Mansoor bin Ali al Abdali, Chief Executive Officer, stressed in the MSX disclosure.
The timing is significant as OQGN embarks on an expansion programme aimed at meeting rising natural gas demand from industrial, power generation and other major consumers. The company’s network extended 4,368 km at end-2025, with capacity of 76.3 billion cubic metres, and serves Oman’s principal population and industrial centres.
Among its flagship investments is the 193-km, 42-inch Fahud–Sohar Loop Line, designed to add around 11 million standard cubic metres per day of capacity to the northern network by 2027. Other projects include the 31-km Budoor Tayseer connection, a 13-km gas supply pipeline serving Duqm Port-area customers, and connections for the Duqm and Misfah independent power projects.
OQGN expects its network to reach around 4,717 km by 2027, with capacity rising to 80.3 bcm, according to figures cited by S&P Global Ratings. The agency assigned OQGN a BBB — issuer credit rating with Stable outlook in August, matching parent OQ SAOC, and forecast annual capital expenditure of RO 45–60 million during 2026-27.
S&P noted that OQGN operates as the monopoly gas transmission provider under a 50-year concession ending in 2070. Its regulated asset base framework allows recovery of approved operating expenditure and returns on capital investment, providing considerable revenue visibility even as debt rises to finance network expansion.
The sukuk programme also fits within the broader OQ Group’s strategy of diversifying its financing channels, although OQ itself has historically relied more heavily on conventional international bonds and Islamic bank financing than public sukuk. In 2021, OQ established a $2 billion Global Medium Term Note programme and issued $750 million of seven-year, 5.125 per cent notes, which remain listed in London.
OQ subsidiaries have nevertheless made extensive use of Sharia-compliant financing structures. In 2024, OQ Base Industries secured an RO 169.2 million syndicated Wakala facility, while OQ Exploration and Production raised RO 192.25 million through a seven-year syndicated Islamic financing facility structured as wakala bil-istithmar.
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