Iran's Gas Exports to Oman Remain Uncertain

Four years after signing an agreement for the annual export of 10 billion cubic meters of gas from Iran to Oman, the managing director of the National Iranian Oil Company stated that gas exports to this southern neighbor will not begin next year. According to ISNA on Friday, February 9, Ali Kardar said in response to a question about this issue, "I don't think gas exports to Oman will start next year. This matter is still in the study phase and we need to determine which point the pipeline should pass through for design purposes." In September 2013, the two countries signed a gas memorandum of understanding, but as long as a contract is not signed, neither party is legally obligated to implement it. At that time, Iranian media reported that "the Minister of Oil announced the conclusion of the largest gas export contract from Iran to Oman worth $60 billion over 25 years." Over the past four years, the two countries have not only failed to agree on the price of exported gas but have also not reached an agreement on the route for constructing the underwater pipeline. Oman insisted that the pipeline should not pass through Emirati waters, which added some technical complexity to the project, as the sea depth in Emirati territorial waters is about 300 meters, while beyond that towards the Sea of Oman, it is about 1000 meters. The land section of this pipeline in Iranian territory is also about 200 kilometers long and connects to the seventh national pipeline. Last month, Hamidreza Araqi discussed the progress of the gas export project to Oman, stating that the implementation of this project is still under the control of the Ministry of Oil, which must be executed in two phases: marine and land. According to Mehr News Agency, he mentioned that the marine infrastructure for gas exports from Iran to Oman is not yet complete, but whenever this section is finalized, we must address the land section and its infrastructure. He stated that "the implementation of the land section has been assigned to Iran, and we have also expressed our readiness for this matter." Last February, Bijan Namdar Zangeneh announced that the total cost of the marine and land sections of the project is about $1.2 billion and stated that the pipeline would be transferred to Oman without passing through Emirati waters. Zangeneh also noted the presence of representatives from companies such as KOGAS from South Korea, Total from France, Shell from the UK, and Mitsui from Japan in gas negotiations between Iran and Oman, predicting that a final agreement on gas exports would be reached before February 2017. Now, a year has passed since Mr. Zangeneh's announcement, and Mr. Kardar states that this project is still in the study phase and needs to be examined regarding the pipeline's route for design. Oman has had a pressing need for gas for domestic consumption and to fill its liquefied gas production capacity in recent years. However, this country launched the first phase of the Khazan gas field with a production capacity of 10 billion cubic meters per year with the help of British Petroleum in October of this year, and it is expected that the production capacity of this field will reach 15 billion cubic meters within three years. Oman intends to produce gas from this field for several decades.