Oman’s natural gas sector must serve several national priorities at the same time. Gas fuels most of the country’s electricity generation, supports heavy industry, supplies petrochemical and fertilizer plants, and feeds a large liquefied natural gas export business at Sur.
Domestic use and exports are therefore closely connected. The same gas resource supports industrial development inside Oman while also generating revenue through international LNG sales.
Natural gas production, including imports, exceeded 52 billion cubic metres during the first eleven months of 2025. The national transmission system delivered 42.4 billion cubic metres during the full year, including 17 billion cubic metres to Oman LNG and 11.8 billion cubic metres to industrial and commercial users.
These flows show why gas policy in Oman is also industrial policy. Each new development can support export earnings, electricity supply, manufacturing, or a combination of all three.
Tight Gas Changed Oman’s Supply Position
The development of Block 61 in central Oman changed the scale of the country’s gas production. The block includes the Khazzan and Ghazeer fields, where gas is held within tight rock formations.
Producing these resources required large drilling programs, hydraulic stimulation, processing facilities, and infrastructure designed for a technically demanding reservoir. The project demonstrated that difficult gas resources could be commercial when developed at sufficient scale.
Operated by bp in partnership with OQ Exploration and Production and other interests, Block 61 produces approximately 1.5 billion cubic feet of gas per day. Its recoverable resources are estimated at around 10.5 trillion cubic feet, and the development can meet roughly one-third of Oman’s gas demand.
Khazzan began production in 2017, followed by Ghazeer in 2020. Together, the fields reduced the risk that rising domestic consumption would limit LNG exports or create a greater need for imported gas.
Oman has continued to broaden its upstream base. Shell began production from the Mabrouk North-East field in Block 10 in 2023. OQ Exploration and Production remains the country’s largest state-controlled upstream company, while international operators provide capital and technical experience in individual blocks.
This creates a mixed development model. The government controls national allocation and long-term strategy, while partnerships are used to explore for gas and develop technically complex reservoirs.
The supply challenge has not disappeared. Demand rises with population growth, air-conditioning use, power generation, and industrial expansion in Sohar, Duqm, Salalah, and Sur. Oman must continue replacing produced reserves if it wants to protect both domestic gas allocations and LNG commitments.
The LNG Complex at Sur Connects Oman to Global Buyers
Oman LNG operates three liquefaction trains at Qalhat near Sur. The complex has an enhanced production capacity of more than 11.4 million tonnes per year and is one of the country’s most important export assets.
Its position on the Arabian Sea side of Oman gives LNG carriers direct access to major shipping routes without first passing through the Strait of Hormuz. Cargoes can move efficiently toward India, East Asia, or European markets.
The plant’s commercial structure was renewed for the period beginning in 2025. Oman LNG secured term commitments with buyers including Shell, TotalEnergies, Turkish energy company BOTAŞ, and several Asian utilities and trading companies. These agreements replaced older contracts and established a clearer sales base into the 2030s.
Oman is smaller than Qatar or the United States as an LNG exporter, but its size and location provide flexibility. Cargoes can be supplied to several regions, while the shorter distance to major South Asian markets can provide a shipping advantage.
The LNG business also connects upstream production directly with state revenue. A shortage of feed gas could reduce plant utilization or create difficult choices between LNG exports and domestic industry. Maintaining the supply chain from producing fields to Qalhat is therefore a national economic priority.
Marsa LNG Gives Sohar a Different Gas Export Role
The next stage of Omani LNG development is not simply another large export train at Sur. Marsa LNG is being developed at Sohar as a smaller project with an expected capacity of approximately one million tonnes per year.
The venture is led by TotalEnergies in partnership with OQ and is expected to begin production around 2028. It will use gas connected to the development of the Mabrouk North-East field in Block 10.
Marsa LNG is designed partly to supply LNG as a marine fuel. Sohar is already a major industrial port, and an LNG bunkering operation could serve vessels travelling through the Gulf of Oman and the Arabian Sea.
This gives the project a different commercial identity from the long-distance LNG export model at Qalhat. Instead of focusing only on large cargoes delivered to overseas terminals, Marsa LNG could help Oman enter the marine-fuel market.
The plant is also expected to use solar power for part of its electricity requirements. This will not remove the emissions produced when LNG is burned, but it can lower the operational emissions associated with liquefaction.
For Oman, the combination of gas, solar electricity, and maritime services supports a wider effort to build new industries around existing energy strengths. The project also reinforces Sohar’s position within the national gas and industrial network.
The Pipeline Network Holds the Domestic Economy Together
OQ Gas Networks operates Oman’s national gas transmission system. By the end of 2025, the network extended approximately 4,368 kilometres. It recorded 100 percent gas availability and no gas outages during the year.
More than 90 percent of Oman’s electricity is generated using gas delivered through this network. Pipelines also connect producing regions with LNG facilities, fertilizer plants, refineries, petrochemical operations, industrial estates, and major ports.
Pipeline capacity is therefore an economic-development issue. A proposed factory cannot proceed simply because gas exists underground. It requires a formal gas allocation and a physical connection capable of delivering the required volume.
Expansion has focused on regions where demand is increasing. The Saib project added a 208-kilometre pipeline in Dhofar and raised regional transmission capacity from 10 million to 16 million cubic metres per day.
OQ Gas Networks is also advancing the Fahud–Sohar loop line. The 193-kilometre project is expected to add 11 million cubic metres per day of capacity to the northern network by 2027. This will support power generation and industrial demand around one of Oman’s largest manufacturing and port areas.
The network is also expanding toward new industrial projects in Duqm. Gas agreements signed in 2025 support planned natural gas liquids extraction, petrochemicals, utilities, and other activities in the Special Economic Zone at Duqm.
These developments reflect Oman’s effort to capture more economic value from gas inside the country rather than exporting every additional unit as LNG.
Industry Competes With Electricity and LNG for Supply
Oman’s gas allocation system must balance several large groups of customers. Power plants require reliable fuel to meet electricity demand, particularly during hot summer months. LNG facilities require stable feed gas to meet export contracts. Industrial projects need long-term supply before investors will build new plants.
This creates a different challenge from that faced by countries that use most of their gas in one sector. Oman cannot expand LNG exports, petrochemical production, metals processing, and gas-fired electricity generation indefinitely without adding upstream supply.
Renewable power may gradually create more flexibility. Large solar and wind projects could reduce the volume of gas burned for electricity, leaving more available for export or industrial use. However, gas will continue to provide dispatchable generation when renewable output is unavailable.
Efficiency is also becoming more important. Modern power plants, reduced pipeline losses, lower methane emissions, and better industrial processes can increase the economic value created from each unit of gas.
The country’s most valuable future gas project may therefore be one that supports several outcomes at once: reliable domestic supply, industrial investment, export earnings, and lower operational emissions.
Natural Gas Will Remain Central to Oman’s Transition
Oman is developing ambitious renewable-energy and green-hydrogen plans, but natural gas will remain central to its economy for years. It provides electricity, industrial heat, chemical feedstock, and export revenue in ways that solar and wind cannot immediately replace.
The transition may gradually change how gas is used. Renewable electricity could free gas for LNG exports or higher-value manufacturing. Carbon capture, methane control, and more efficient processing may become increasingly important as international customers examine the emissions associated with imported fuels.
The main constraint is allocation. Oman must decide how much gas should go to electricity, existing industries, new economic zones, LNG facilities, and future export projects.
Strong production from Block 61 and other developments gives the country more room to manage this balance, but long-term security requires continued exploration and investment.
Oman’s gas sector is moving toward a more integrated model in which upstream fields, pipelines, LNG exports, industrial development, ports, and renewable power form parts of the same strategy. Its success will depend on whether new supply and transmission capacity can keep pace with commitments expanding across nearly every part of the economy.
