Unified Gas Buyer Proposal: Implications for Investment and Growth in Oman’s Power Sector
MUSCAT, DEC 30 – The Ministry of Energy and Minerals has announced it is considering the establishment of a "Unified Gas Buyer" for Oman’s electricity sector. This initiative aims to optimize the strategic use of the Sultanate’s natural gas resources as the energy transition accelerates.
Natural gas currently constitutes nearly 90% of Oman’s electricity generation, with renewable sources—primarily solar and wind—accounting for the remaining 10%. By 2030, the share of renewables is expected to increase to 30% in alignment with national decarbonization targets, with a goal of achieving Net Zero emissions by 2050.
To facilitate the efficient integration of renewables into a system predominantly reliant on gas-fired generation, the Ministry is exploring a range of reforms designed to enhance gas utilization. The combined use of gas, solar, and wind energy is anticipated to improve power system flexibility and reduce overall dependence on fossil fuels.
According to the Ministry’s latest newsletter, Wealth, the proposed unified gas buyer would improve planning and control over gas quantities allocated for electricity generation. This approach aims to optimize the demand curve, rationalize gas consumption, and enhance operational efficiency across the national system.
Energy experts view this proposal as a potentially transformative market design shift. Presently, gas allocations to power producers are largely dictated by long-term agreements that can promote baseload operation, even when renewable energy is available. A unified gas buyer would centralize procurement and allocation, facilitating more efficient dispatch while prioritizing higher-efficiency plants. This would help to reduce gas consumption during periods when renewable resources can meet demand, especially during peak evening hours.
Centralized gas procurement could also minimize inefficient consumption within the power sector and lessen exposure to excess take-or-pay commitments. This would potentially free up gas for higher-value applications, such as industrial use, LNG production, petrochemicals, or exports—reinforcing Oman’s broader energy transition objectives by ensuring more strategic gas deployment.
Additionally, the Ministry is working on refining the gas demand profile for electricity production. This involves prioritizing land allocation for renewable energy projects based on strict technical and environmental criteria. Plans are underway to optimize daily and seasonal gas demand by integrating energy storage into renewable installations, making the grid more robust during peak periods and decreasing reliance on gas-fired generation during evening hours.
Notably, Oman is also investigating underground natural gas storage solutions as part of its resource optimization strategy. The Ministry is currently assessing suitable geological formations to ensure supply flexibility and energy security during peak or emergency situations. This initiative is expected to enhance grid stability and mitigate exposure to fluctuations in global gas markets.
To foster innovation and ensure system preparedness for advanced technologies, the Ministry is developing a regulatory sandbox. This framework will allow controlled testing of solutions such as battery storage, pumped hydro, and flexible loads before their commercial deployment. Its aim is to bolster market readiness, encourage local innovation, and accelerate the development of Omani capabilities in smart grids and energy storage.
The Ministry concluded that the integration of energy sources, enhancements in gas efficiency, deployment of storage technologies, and support for innovation collectively represent a comprehensive strategy driving Oman’s transition to a low-carbon future. This transformation is viewed not only as an environmental necessity but also as an economic and strategic opportunity to create a more efficient, competitive, and sustainable economy, positioning Oman as a regional leader in energy mix management and sustainability solutions.
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The establishment of a Unified Gas Buyer signals a pivotal shift in Oman’s energy landscape, creating significant opportunities for businesses in sectors like renewable energy and technology. This integrated approach not only enhances operational efficiency but also mitigates risks associated with gas supply volatility—providing a favorable climate for smart investors to engage in innovative, sustainable projects. Entrepreneurs should prioritize investment in renewable energy solutions and energy storage technologies to leverage Oman’s strategic transformation towards a low-carbon economy.
