Gas Project With Oman Receives Fresh Impetus

Gas Project With Oman Receives Fresh ImpetusGas Project With Oman Receives Fresh Impetus

Iran and Oman concluded a fresh round of talks on economic and energy cooperation on Sunday and set a six-month deadline to take their biggest joint economic project to a new level.

"The feasibility study on Iran-Oman gas export pipeline project will conclude in a space of six months," Omani Foreign Minister Yusuf bin Alawi bin Abdullah was quoted as saying by Shana.

Bin Alawi made the statement after meeting Iran's Oil Minister Bijan Namdar Zanganeh and other government officials in Tehran on Sunday.

"Our goal is to supply Iran's gas to global markets through Oman," bin Alawi said. "Iran and Oman have friendly relations … We are interested in receiving gas from Iran and are on board with all the details of the project."

With a strict sanctions regime against Iran in the past several years, Tehran and Muscat cautiously pushed forward a hefty $60 billion project to deliver Iran's natural gas to Oman through a 260-kilometer subsea pipeline in the Persian Gulf.

The pipeline, which is expected to be laid by 2019 at a cost of $1 billion, will supply 28 million cubic meters a day of natural gas (10 billion cubic meters a year) from Iran to Oman under a 25-year contract.

The two countries signed an agreement in September to study the operational and economic feasibilities of the project and continued to hammer out financing terms in January.

The two sides also explored grounds for cooperation in oil and petrochemical sectors, as the Persian Gulf neighbors gear for a new chapter in relations following the lifting of international sanctions against Iran last month.

Bin Alawi added that "Oman's coasts across the Arabian Sea are open for more cooperation with Iran," signaling Oman's interest in boosting bilateral trade with Iran, which is shy of $1 billion a year.

  Commitment to Oman

Zanganeh underscored the gas export deal as the cornerstone of talks with Oman and looked forward to a boost in ties with the small Persian Gulf neighbor.

"Oman was by our side in times of adversity. Bilateral relations will undoubtedly improve in the post-sanctions era," he said.

The US and the EU revoked some sanctions against Iran in January, paving the way for the country to reach out to the international community without fear of economic penalties.

Data show bilateral trade stood at more than $900 billion in 2014, but the volume is poised to exceed $4 billion in three years as Iran is considering Oman to gradually replace the UAE as its central hub for exports.

The small Arab country wants Iran's gas to meet the demand of its 3.6 million population, while a portion of supplies is planned to be used as feedstock to produce liquefied natural gas.

Iran has been pushing for the gas contract to capitalize on Oman's untapped LNG production capacity, which officials estimate to be 2.5-3 million tons a year.

Tehran is planning to first expand a foothold in the Middle East's promising energy markets in the post-sanctions era, including Kuwait, the UAE and Saudi Arabia.

Nearly all of Iran's gas exports go to Turkey, Armenia and Azerbaijan; Ankara receives more than 90% of Iran's supplies while Yerevan and Baku import around 6% and 3% of Iran’s natural gas exports, respectively, under swap agreements.

The report on the Omani minister's meeting with Iran's President Hassan Rouhani is published on Page 2 today.