Oman’s OQ Gas Networks kicks off subscription period for country’s biggest IPO listing: The subscription period for the retail and institutional portions of Omani state-owned natural gas network operator OQ Gas Networks’ (OQGN) IPO on the Muscat Stock Exchange (MSX) began yesterday, as per the IPO prospectus (pdf). OQGN is offering up to 49% of its total share capital, aiming to raise as much as OMR 297 mn (USD 771 mn). OQGN is the sole operator of Oman’s gas transportation system and was valued at OMR 606 mn (USD 1.6 bn) in the run up to the IPO. The offering will be the biggest listing for Oman on record.

The details: The institutional offering covers 40% of the shares on offer at a price range between OMR 0.131-0.14 per share (USD 0.34-0.36), while the retail offering covers another 30% of the offering. The retail offering prices shares at a disc. maximum of OMR 0.126 (USD 0.33) per share. The subscription period for the institutional offering closes on 9 October, while the retail subscription closes on 5 October. OQGN shares are expected to begin trading on the MSX on or around 24 October.

Who’s already bought in? The remaining 30% of shares is reserved for anchor investors — the Saudi Omani Investment Company, Falcon Investments, and Belgium-based Fluxys International — which have made “irrevocable commitments,” according to the prospectus. The Saudi Omani Investment Company is wholly owned by Saudi Arabia’s Public Investment Fund, while Falcon Investments is a subsidiary of the Qatar Investment Authority. Fluxys International is an independent energy infrastructure and utilities company that aims to develop low-carbon hydrogen and CO2 routes to import into Belgium and Europe. The three have agreed to buy shares at a price of OMR 0.14 (USD 0.36) per share, with each of the three snapping up 10% of the shares on offer.

Why is this important? Countries with an established gas network will have an advantage in hydrogen production and transport, as hydrogen could be blended into existing natural gas networks. Current research shows that hydrogen can be safely injected into the gas grid up to 5-10% volume, and is expected to reach 20% by the end of the decade. A gas supply that includes low-carbon hydrogen would lower CO2 emissions and help scale up production of hydrogen. The inclusion of Fluxys as a shareholder signals that the IPO will facilitate Oman’s plans to use its gas network for hydrogen transport.

Oman is banking on its existing gas infrastructures: OQGN’s growth strategy includes playing a vital role in the Gulf country’s energy transition by facilitating hydrogen and captured carbon transportation and storage. OQGN is working with Oman’s hydrogen development entity Hydrom on a common-use infrastructure scheme to accelerate the development of the necessary infrastructure for previously signed hydrogen projects, Hydrom Managing Director Abdulaziz Al Shidhani told The Energy Year in an interview in July. Nama Group for Electricity and Water are also working on the common infrastructure scheme which is being fast-tracked by the government with an estimated timeline of six to seven years to be completed.

Advisors: Oman’s biggest financial services provider, Bank Muscat, is issue manager, according to the prospectus. Bank Muscat, EFG Hermes, and AN International Bank are joint global coordinators. Collection agents for the IPO include Ahlibank, BankDhofar, Bank Muscat, Bank Nizwa, Horizons Capital Markets, EFG Hermes Oman, National Bank of Oman, Oman Arab Bank, Sohar International, Ubhar Capital, and United Securities.