The Persian country is looking to establish LNG supply routes to Europe and Asia through Oman as it races towards re-building and developing infrastructure for its huge oil and gas reserves after years of trade sanctions were lifted a year ago.
Oman and Iran agreed on a 25-year gas supply deal in 2013, valued at over $60 billion. Despite renewed efforts on the project after the lifting of sanctions, disagreement over price and U.S. pressure on the Gulf sultanate to find alternative suppliers has delayed the project.
"The two countries agreed that the gas exports pipeline avoids waters controlled by the United Arab Emirates and passes through deep waters," Iran’s Minister of Oil Bijan Namdar Zanganeh was quoted as saying on Tuesday by Mehr news agency.
Zanganeh said during his meeting with Oman's Minister of Oil and Gas Mohammed bin Hamad al-Rumhy in Tehran that a new agreement was signed that extends the previous deal. Iran's oil minister said the whole project would need $1.2 billion of investment, and the re-routing would not have an economic impact.
After the oil ministers meeting, Ali Amirani, director of Gas Export Department of the National Iranian Gas Company said the project is expected to come on-stream by 2020, Iran’s Shana News reported.
Iran will export 28 million cubic meters of gas to Oman per day for a period of 25 years through a pipeline that will go to the sultanate through the Persian Gulf. A third of the exported gas is planned to be turned into LNG at Oman’s Qalhat plant, while the rest will be used domestically.
France’s Total, Royal/Dutch Shell, South Korea’s Korea Gas Corporation (KOGAS), Germany’s Uniper and Japan’s Mitsu have submitted tenders for the gas project which was signed between Iran and Oman in 2013.