National Gas Advances Mini-LNG Project in Oman: Key Opportunities for Investors and Entrepreneurs
MUSCAT, MAY 19 — National Gas Company, a leading LPG distributor in Oman, has made a pivotal move towards advancing its proposed mini-liquefied natural gas (LNG) project by signing a Memorandum of Understanding (MoU) with Abraj Energy Services. This collaboration aims to promote decarbonisation in oilfield operations.
Initially, the two companies will jointly launch a pilot project to assess the use of cleaner fuels as an alternative to diesel in generators operating drilling rigs and other oilfield facilities. Dr. Rachid Majjad, CEO of National Gas, stated that the pilot’s goal is to evaluate the technical feasibility, operational performance, safety, and commercial viability of this alternative energy solution. The findings will be crucial in deciding the potential establishment of an LNG plant for long-term use, pending satisfactory results.
The MoU, signed during the Oman Petroleum & Energy Show, furthers a proposal revealed earlier this year in which National Gas is considering an investment of approximately $100 million to develop a small-scale LNG production facility in Oman. This venture would significantly diversify the company’s portfolio, which currently focuses on LPG distribution and synthetic natural gas (SNG) systems.
In an interview with UK-based publication The Energy Year, Dr. Majjad explained that the project plans to convert diesel-powered generators at Abraj’s rig sites to dual-fuel systems running on LNG. This conversion is expected to reduce carbon dioxide emissions by around 30% and lower operating costs by roughly 15%.
“We intend to invest $100 million to establish our own LNG production facility,” said Dr. Majjad. “The facility will source gas from OQ, liquefy it, and distribute LNG to rig sites. Given that rigs frequently relocate, all regasification units, cryogenic tankers, and related equipment will be mobile.”
Abraj Energy Services, which controls approximately half of Oman’s rig market, is anticipated to be the anchor off-taker, initially supplying around 85 rigs.
In the official filing to the Muscat Stock Exchange, Dr. Majjad highlighted that the pilot aligns with Oman’s sustainability goals and national decarbonisation agenda. “This initiative supports both parties’ commitment to reduce CO₂ emissions in harmony with Oman’s strategic objective to achieve net-zero carbon emissions by 2040,” he noted.
However, he clarified that the MoU pertains exclusively to the pilot phase and does not bind either party to proceed with the LNG plant or associated investments.
If the project proves commercially viable, the mini-LNG plant would introduce the first regular domestic LNG distribution system in Oman. LNG transported in insulated cryogenic road tankers could then be supplied to factories, industrial sites, remote communities, mining operations, and power plants nationwide.
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National Gas Company’s move to pilot a mini-LNG project in collaboration with Abraj Energy signals a strategic shift towards cleaner, cost-efficient energy solutions in Oman’s oilfield sector. For businesses, this opens opportunities in low-carbon fuel adoption and potential new LNG distribution markets, while investors should closely watch the pilot’s outcomes to gauge the viability of scalable LNG infrastructure aligned with Oman’s 2040 net-zero goals. Smart entrepreneurs can explore innovation in mobile LNG logistics and dual-fuel technology as key growth areas in the evolving energy landscape.
