Tehran, Muscat Discuss Gas Project, Crude Market

Tehran, Muscat Discuss Gas Project, Crude MarketTehran, Muscat Discuss Gas Project, Crude Market

Oil Minister Bijan Namdar Zanganeh and his Omani counterpart Mohammed bin Hamad Al Rumhy discussed a subsea gas pipeline and the global oil market in a meeting in Tehran on Saturday.

"Iran and Oman will cooperate on lowering oil prices," the Omani official said, adding that oil producing nations have taken a significant hit in oil revenues, ISNA reported.

Oman is the largest Middle East oil producer outside the 13-member Organization of Petroleum Exporting Countries.

The country's output in March averaged slightly below 1 million barrels a day.

Zanganeh also underlined Tehran's converging perspective with Muscat, which has often played a conciliatory role in political and economic rifts in the Middle East.

"We discussed oil prices and how to re-stabilize the market. We have close views on the issue," he said.

Oil prices have been on a rollercoaster ride over the past two years. Oil traded at above $100 per barrel in mid-2014, but fell to $27 in January—its lowest level in more than a decade—before recovering to above $40-per-barrel range in recent weeks.

Iran may finally be ready to support a Russian and Saudi-backed plan to freeze crude output.

Tehran has insisted in the past few months that it will discuss freezing production only after reaching its pre-sanctions production level of 4 million bpd.

The country is now pumping around 3.7 million bpd, with exports at 2.4 million barrels, or just around 100,000 bpd shy of its pre-sanctions level.

  Gas Plan

The two sides also picked up on the two country's potentially biggest economic project that calls for supplying gas through a subsea pipeline from Iran's South Pars Gas Field in the Persian Gulf directly to the Sultanate of Oman.

Iran and Oman are in the feasibility study stage of the project. Zanganeh said Iranian Offshore Engineering and Construction Company, the Iranian side in the feasibility studies, updated the Omani minister of its findings.

The proposed 260-kilometer pipeline calls for the supply of 20 million cubic meters of natural gas per day to Oman for 25 years.

Oman is planning to use part of the supply for liquefied natural gas production.

According to Zanganeh, a South Korean firm is interested in bankrolling the subsea pipeline to buy Oman's presumptive LNG output. He did not name the company.

Zanganeh and Al Rumhy also discussed Oman's interest in financing projects in the upstream petroleum industry and Iran's investment in LNG.