POST Online Media Lite Edition


Iran to export gas to Oman in 25-year, $60 billion deal

Staff writer |
Iran signed a memorandum of understanding (MoU) to export gas to Oman from 2015, in a 25-year deal valued at approximately $60 billion, Iran's energy ministry news service said.

Oman agreed to buy gas from Iran back in 2005 and a deal from 2007 included plans for Oman to process Iranian gas for export as liquefied natural gas (LNG). However, the two sides have never finalised terms and Oman has been pressured by the United States to source fuel from alternative suppliers such as Qatar, according to U.S. embassy cables released by Wikileaks.

Oman began importing Qatari gas in 2007 but its demand has risen rapidly since, threatening its LNG exports and pushing Muscat back to the negotiating table with Tehran.

The latest MoU signed by new Iranian energy minister Bijan Zanganeh and his Omani counterpart Mohammed bin Hamad Al Rumhy, includes an agreement to start laying a gas pipeline to Oman as soon as possible, oil ministry news service Shana reported.

"We can start implementation of the project; mainly because top executives of the two countries insist that the project should be implemented as soon as possible," Shana quoted Zanganeh as saying during a visit to Tehran by Oman ruler Sultan Qaboos.

Iran sits on the world's largest gas reserves, according to the latest statistics compiled by BP, but it has been prevented from exporting much of it because of western sanctions that have slammed the brakes on its LNG export ambitions.

Oman has plants able to produce up to 10.4 million tonnes of LNG a year but has not produced more than 8.8 million in the last five years and output fell to 8.4 million in 2012, according to Oman LNG's latest annual report.

What to read next

Iran, Oman sign MOU on farming, fisheries
Iran, Oman gas pipeline will not cross UAE
Iran, Oman launch direct shipping route