National Gas to Invest $100M in Mini-LNG Project: What This Means for Oman’s Energy Market and Investors
MUSCAT, Jan 16 – National Gas Company, a well-established Omani energy firm specializing in the marketing and distribution of liquefied petroleum gas (LPG) domestically and internationally, is considering an investment of approximately $100 million in a small-scale liquefied natural gas (LNG) plant. This facility aims to meet the low-carbon energy needs of oil and gas rigs across Oman.
Listed on the Muscat Stock Exchange (MSX), National Gas is expanding its business portfolio beyond its core LPG operations and synthetic natural gas (SNG) systems. The proposed mini-LNG project represents a strategic diversification into LNG production and distribution.
If approved, this project will be the first of its kind in Oman’s LNG sector, which is currently dominated by large-scale entities such as Oman LNG, Qalhat LNG, and the Marsa LNG project, all involving multi-billion-dollar investments.
In an interview with The Energy Year, CEO Rachid Majjad detailed the company’s LNG strategy. National Gas has signed a memorandum of understanding with Abraj Energy Services, a leading Omani drilling and well services company, to facilitate energy transition. The initiative involves converting diesel generators at Abraj’s rig sites to a dual-fuel system powered by LNG. This upgrade is projected to reduce carbon dioxide emissions by 30% and operating costs by 15%.
Majjad stated, “We plan to invest $100 million to build our own LNG production facility. The plant will source gas from OQ, the state-owned integrated energy group, liquefy it, and distribute LNG to rig sites. Mobile regasification units, cryogenic tankers, and associated equipment will accommodate rigs’ frequent relocations. Abraj, which holds about 50% of Oman’s rig market, will be the primary off-taker. Initially, we aim to supply 85 rigs.”
The company is currently awaiting final pricing approval from the Integrated Gas Company (IGC), Oman’s fully state-owned natural gas aggregator and shipper. Upon approval, construction is set to begin in the first quarter of 2026, with a completion timeline of approximately two years. Majjad emphasized that “LNG in Oman is primarily exported and not readily accessible for domestic use, so this project addresses a critical strategic gap.”
Once operational, the mini-LNG plant will, for the first time in Oman, offer a regular supply and domestic distribution of LNG. Delivered via insulated cryogenic road tankers, LNG can reach factories, industrial facilities, power plants, remote communities, and mining operations throughout the country.
The production process mirrors that of large-scale LNG plants, where feed gas is cooled to around –162°C. The distinction lies not in the fuel but in the scale, logistics, and supply chain purpose. Export LNG involves large storage tanks, specialized carriers, and delivery to regasification terminals before integration into national grids. In contrast, trucked LNG for domestic use eliminates the need for costly storage, shipping, and regasification infrastructure, providing a practical and cost-efficient solution.
Trucked LNG is widely adopted globally as a means to decarbonize industries off the pipeline grid and provide a dependable backup fuel source. This project positions National Gas at the forefront of such innovation in Oman.
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National Gas Company’s planned $100 million mini-LNG plant signals a strategic shift towards domestic low-carbon energy solutions and diversification beyond traditional LPG supply. For businesses, this creates opportunities to reduce operational costs and carbon footprints, especially in oil and gas rig operations, while addressing a critical gap in Oman’s local LNG availability. Smart investors and entrepreneurs should consider the potential for growth in mobile LNG infrastructure and new market niches in decarbonization technologies as Oman advances its energy transition goals.
