MUSCAT, March 12 Iran has sealed an agreement to
export 10 billion cubic metres of gas per year to Oman, Iran's
state news agency IRNA said on Wednesday, in a deal that also
involves building a pipeline across the Gulf at a cost of about
The accord, signed during Iranian President Hassan Rouhani's
first visit to Muscat since his election last year, came out of
a memorandum of understanding between the countries in August
for the sale of Iranian gas to Oman from 2015, in a 25-year deal
valued at around $60 billion.
Energy-hungry Oman agreed to buy gas from Iran as far back
as 2005 and a later draft deal in 2007 included plans for Oman
to process Iranian gas for export as liquefied natural gas
But the two sides had never finalised terms and Oman had
been pressured by the United States to source fuel from
alternative suppliers such as Qatar, according to U.S. embassy
cables released by Wikileaks.
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
over its contested nuclear programme.
Oman's state news agency ONA said three agreements were
signed between Oman and Iran, one of which was an initial deal
on building a gas pipeline linking Iran with Oman.
The agency said the accord was signed on Wednesday by an
advisor of the Omani oil minister, Saif bin Hamad al-Sulaimani,
and the head of the Iranian negotiating team, Sayed Kamali. The
other two contracts were on employment and training, ONA said
without giving any further details.
IRNA quoted Iranian oil minister Bijan Zanganeh as telling
journalists in Muscat that no price has been agreed for the gas,
which will come from Iran's giant North Pars field in the Gulf
and which would branch off an Iranian pipeline planned to export
gas to Pakistan.
"Today after seven months, finally the agreement to export
Iranian gas to Oman was sealed," IRNA quoted Zanganeh as saying.
He said the gas will be shipped through a 260 km (162 mile)
pipeline that will be built through Iran's Hormuzgan Province to
Oman's Sohar port on the other side of the Gulf and that the
project was expected to come on stream within three years.
"We are entering the Omani retail market for the first time
and contrary to other contracts, we have not agreed on a
price," Zanganeh said, according to IRNA.
He said Oman will use some of the gas for its domestic
consumption but some of the gas may be sold abroad through a
joint marketing company to be set up at a later date.
Zanganeh said Oman will pay for the entire cost of the
pipeline and related infrastructure, estimated at around $1
billion, adding that Muscat will be compensated for its
investment through revenues generated from the sale of the gas.
Iran has won some relief from the sanctions in January after
it halted its most sensitive nuclear operations under a
preliminary deal with world powers reached in November.
(Reporting by Mehrdad Balali in Dubai and Fatma Al Arimi in
Muscat, Writing by Sami Aboudi)