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Oman, Iran close in on $60 billion gas plan

Oman's Sultan Qaboos bin Said (R) walks with Iran's President Hassan Rouhani in Muscat March 12, 2014.

An Omani delegation is in Tehran for the finalization of the operational plan for transfer of the Iranian gas to the sultanate via a pipeline across the Persian Gulf, a top energy official says.

“Currently, the Iranian adviser for studying (the subsea section of) the pipeline for 200 kilometers from Kuh-e Mubarak to Oman’s Sohar port has been chosen,” head of the National Petrochemical Company (NPC) Alireza Kameli said Wednesday.

The onshore section of the pipeline in Iran will be built for another 200 km from Rudan to Kuh-e Mubarak, he added.

“According to the plan, engineering studies in both the offshore and onshore sections will be carried out simultaneously so that the implementation of the two lines does not hit a snag,” Kameli added.

The $60 billion deal was concluded during President Hassan Rouhani’s visit to Muscat in 2013 to ship 10 million cubic meters per day of the Iranian gas to Oman for a period of 15 years.

 The two countries signed another deal in 2007 to build a liquefied natural gas (LNG) plant in Oman to process the Iranian gas.

Oman has undertaken to pay the entire cost of the pipeline and the related infrastructure, according to Iran’s Minister of Petroleum Bijan Zangeneh.

“Gas exports to Oman and entry into its retail market will make it possible to sell the Iranian natural gas to the region, especially Asian countries,” he has said.  

On Wednesday, Kameli said the Persian Gulf littoral states are Iran’s top priority for gas exports in the face of requests by European companies.

“Currently, many countries have voiced readiness to invest in our upstream and downstream gas sector and are seriously pushing for imports of the Iranian gas.

“Although we cannot ignore the European gas market, exports to Europe come later in our priorities,” Kameli said.

For the gas transfer to Europe, Iran has ruled out the pipeline option which is too costly. Officials, instead, have hinted at LNG shipments but the first cargo is not believed to come about at least in the near future.    

LNG constitutes 31% of the world’s gas trade, with 70% of it going to Asia and the Middle East, Kameli said in June, adding there are currently 60 LNG import terminals in Asia, with plans to build 40 more.


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