Bid & Tender
Oman to Speed Up Planned Gas Import Pipeline Project

Date : Jan 27, 2016

Oman expects speedier completion of a planned pipeline to import natural gas from Iran now that international sanctions against Tehran have been lifted, the energy minister of the sultanate said.


Iran sits on one of the world's largest gas reserves, which Oman has been eyeing as it hopes to feed energy-intensive industries and liquefied natural gas (LNG) export plants.


Price disagreements, Western sanctions that have stunted Iranian energy projects and US pressure on Oman to find other suppliers have prevented real progress on the pipeline project.


In 2013, the two countries signed an agreement on gas supplies to Oman in a deal valued at $60 billion over 25 years. Since then, however, the project - which includes building a subsea pipeline - has stalled.


"I am very optimistic that now the sanctions have been lifted, the gas pipeline project will move in a faster track than before," said Oman Energy Minister Mohammed bin Hamad Al Rumhy.


"We were facing lots of difficulties. Now we can order compressors, we can order pipes, seek consultancy help, we can talk to banks about financing. Things have changed."


Rumhy was speaking during a visit by Iranian Oil Minister Bijan Zanganeh to Muscat.


"We think we can finish the FEED (front-end engineering design) in five months' time," Rumhy said.


"So we are giving ourselves by the end of Q2 to finish the FEED and hopefully by the end of the year or Q1 next (year) to start the EPC (engineering, procurement and construction) work, which will take us two years, (to) 2017-2018," he said, adding that Oman hopes to start receiving Iranian gas by 2019.


The plan is to use Iranian gas for domestic needs as well as exporting it to global markets after having it liquefied in Oman, Rumhy said.


The pipeline will have the capacity to carry 1 billion cubic feet of gas per day (bcfd) but that might be raised to 1.5-2 bcfd because of high demand in the region, he said.


"I think this will help us to make Muscat a gas hub for Gulf countries. We can export and import gas and supply it to whoever wants to buy across the region. We would like to start thinking along those lines," he said.


"With the gas pipeline from Iran ... this will be a major milestone towards our goal of making Oman a center for gas trading in the region," he said.