Muscat – Global credit rating agencies S&P Global and Fitch have both assigned OQ Gas Networks (OQGN) a BBB- rating with a stable outlook.

S&P said its BBB- global-scale issuer credit rating on OQGN is in line with that of its parent, OQ Group. The agency considers OQGN to be strategically important to the group.

‘OQGN is tightly integrated with the OQ Group as a critical midstream operator that connects the upstream and downstream segments through its vast pipeline network. In addition, OQ Group has a 51% stake in OQGN. Therefore, we see a high likelihood that OQ Group would extend extraordinary support to OQGN if required,’ S&P said.

It added that the stable outlook on OQGN reflects the outlook on its parent, OQ Group.

According to S&P, OQGN’s credit profile benefits from its low-risk utility operations. The company has a 50-year concession agreement with the government of Oman for gas transportation, running until 2070. Under the concession, OQGN is the monopoly provider of gas transmission services and an essential service provider.

The company is supervised by Oman’s Authority for Public Services Regulation (APSR), which S&P said supports OQGN’s very low industry risk profile.

S&P forecasts that OQGN will maintain stable financial metrics through 2026 and 2027 despite planned investments to expand its pipeline network.

‘OQGN will continue to invest in further network expansion so that it can meet rising demand for natural gas in Oman. To expand its network in support of Oman’s medium-term gas production and demand targets, we project that OQGN’s annual capex in 2026 and 2027 will be RO45mn-RO60mn. This includes RO10mn-RO15mn in maintenance capex – the remainder will be allocated to growth and acquisitions,’ S&P said.

Separately, Fitch Ratings has published OQGN a Long-Term Issuer Default Rating (IDR) of BBB- with a stable outlook.

Fitch assesses OQGN’s Standalone Credit Profile (SCP) at bbb-, the same level as that of its majority shareholder, OQ Group, and Oman’s sovereign rating of BBB- with a stable outlook.

‘The rating reflects OQGN’s strong market position as the sole gas transmission and distribution company in Oman, with predominantly regulated earnings within a supportive and transparent regulatory framework with negligible volume and price risks. This provides healthy revenue and cash flow visibility,’ Fitch said.

The agency said the rating also takes into account OQGN’s geographical concentration and smaller scale compared with higher-rated peers.

‘We forecast negative free cash flow (FCF) in 2026-2028, driven by higher capex and continued dividend distributions, but we expect funds from operations (FFO) net leverage to remain commensurate with the current rating,’ Fitch said.

Fitch also sees no impact on OQGN from the Iran conflict, saying that the company’s assets ‘have not been damaged in any way by the Iran conflict’.

‘Gas transportation services continued without interruption, and the company has maintained normal operational performance. Under the regulatory framework, OQGN revenues are also not affected by any volume or price risks,’ the agency noted.