Oman to Finalize Gas Supply Contract by August

EghtesadOnline: Tehran and Muscat are planning to sign a final agreement on the export of Iranian natural gas to the sultanate via a subsea pipeline in a month, managing director of the National Iranian Gas Export Company said.

News ID: ۷۴۵۶۷۵

21 July 2018

“We are holding negotiations with the Omani side which, if successful, will lead to a contract between the National Iranian Oil Company and Oman’s Ministry of Oil and Gas on the framework of the project,” Mehran Amir-Moeini was also quoted as saying by ISNA on Friday.

The official added that following the conclusion of the agreement, the project’s contractor will be chosen by a tender.

Ruling out speculations on halting the gas transfer project, Amir-Moeini noted that the reason behind the delay in wrapping up a deal is complicated legal issues between the two sides and disparities in the countries’ laws, which have made the process time-consuming. “Regarding the progress made in the talks, we hope an agreement will be finalized in the next [fiscal] month [July 23-Aug. 22],” Financial Tribune quoted him as saying.

Oil Minister Bijan Namdar Zanganeh told IRNA that the deal would be finalized in two stages: The first of which is planned to be concluded by the end of May and the second is going to be signed by the end of June.

According to Amir-Moeini, while a certain volume of gas will be liquefied by Oman and NIOC will market the commodity, about 85% of the project account for marketing the exported natural gas.

“India is the most serious customer, which has demanded gas supply. However, negotiations are in the preliminary stages and are yet to be finalized.”

He added that Kuwait and the UAE are other options for the sale of natural gas.

In February last year, Tehran and Muscat signed a preliminary agreement on the pipeline project that is estimated to cost $1.2 billion. Plans call for stretching the pipeline infrastructure by nearly 200 kilometers to transfer gas from the port city of Asalouyeh in the Persian Gulf to Kouhmobarak in Hormozgan Province alongside the Sea of Oman. From there, a subsea pipeline will be laid to Oman's Sohar Port.

The sultanate could import as much as 20 billion cubic meters a year of Iranian gas, or more than 50 mcm/d, to meet demand.