Iran has agreed to revive a long-stalled project to lay an undersea pipeline to carry gas to Oman.
The country sits on one of the world’s largest gas reserves that Oman has been eying, as it hopes to feed energy-intensive industries and liquefied natural gas plants, IRNA reported.
The agreement to revive the project was reached during Oil Minister Javad Owji’s trip to Oman ahead of an official visit to the Arab state by Iranian President Ebrahim Raisi on Monday.
Owji met with his Omani counterpart Mohammed bin Hamad al-Rumhi to discuss cooperation between the two countries in various energy sectors.
In 2016, officials of state-owned National Iranian Gas Exports Company met with Oman's Oil Ministry and three international oil companies – Shell, Total and Korea Gas Corp – to explore the potential to pipe gas from Iran to Oman.
This followed a 2013 agreement by the two nations, valued at $60 billion, to develop a 15-year gas export plan via a seabed pipeline. The pipeline proposed at the time would have had the capacity to transport 28 mcm/d of Iranian natural gas to Oman.
Those plans were abandoned when the US withdrew from the Joint Comprehensive Plan of Action, the formal name of Iran nuclear deal, in May 2018, reinstating sanctions against the Middle East nation.
But with the US now under President Joe Biden, the two sides have begun indirect talks in Vienna, Austria, with the aim of reinstating the deal, but the negotiations have currently stalled.
Based on negotiations between Tehran and Muscat, Iran will carry out the onshore section of the gas pipeline.
From Asalouyeh to Sohar
Plans call for extending the present pipeline infrastructure by nearly 200 kilometers to transfer gas from the port city of Asalouyeh in the Persian Gulf to Kuhmobarak, Hormozgan Province, in the Sea of Oman. From there, a subsea pipeline will be laid to Oman's Sohar Port.
The proposed pipeline would run from the giant South Pars Gas Field in Iran to Sohar in northern Oman, where an existing pipeline runs to Salalah near the Yemeni border.
The sultanate could import as much as 20 billion cubic meters a year of Iranian gas, or more than 50 mcm/d, to meet its demand.
The pipeline will circumvent the maritime boundary of the UAE because the Emiratis will not allow the pipeline to be laid in their territorial waters.
The decision means the pipeline will be laid on parts of the Sea of Oman, which could go deeper than planned. The pipeline may be laid 1,000 meters below the sea's surface instead of the shallower UAE waters at around 300 meters.
International oil and gas firms, including Total, Royal Dutch Shell, South Korea's KOGAS, Mitsui & Company of Japan and German firms Uniper SE and E.ON SE, could be involved in the gas venture.
Russia, Iran's political ally and an increasingly close economic partner, could also help with the development plan. Iran is interested in Gazprom’s participation in the Iran-Oman gas pipeline.
Iran produces about 1 billion cubic meters of gas per day, but exports just a fraction — around 40 mcm/d — to Turkey and Russia. The country holds the world's largest gas reserves after Russia.
Ideally, the pipeline could then be extended to Yemen, Rumhi had said before.
"Yemen, one day, will have peace," said Rumhi. "The day they sign a peace agreement, the first thing they will ask for is energy. Gas is needed in a country like Yemen to start to move from conflict to creating industries and opportunities for their people."
At present, there is little demand for gas in Yemen, the Arab world's poorest country, due to its patchy infrastructure and devastation wrought by a seven-year-long civil war.
In addition to reexporting Iranian gas to Yemen, Oman would look to utilize it in industry, increase its LNG and petrochemical production capacity, and also potentially delve into the hydrogen space.
