Talks on Iran-Oman pipeline reach standstill

Pricing disputes and sanctions on Iran major obstacles to gas project

Iran currently produces 62.8mn litres of gas per day.
Iran currently produces 62.8mn litres of gas per day.

Talks on Iran-Oman natural gas pipeline have reached a standstill due to pricing disputes and international sanctions on Iran, Afkar News has reported.

Despite earlier signs that the project was moving ahead, construction of the 260-km below-sea pipeline has not yet begun, Hamid-Reza Araqi, managing director of the National Iranian Gas Company, was quoted as saying by Iran's Press TV.

"There has been no progress in the negotiations, as yet," said Araqi.

Negotiations over the export of gas from Iran to Oman are still under way at the Ministry of Petroleum, and once the talks are finalised, the Oman pipeline contractor will begin work, Araqi added.

The agreement for Iran-Oman pipeline that would connect the gas-rich province of Hormuzgan to Sohar was signed during the visit of Iranian President Hassan Rouhani to Muscat in March 2014.

At the time, Iranian Oil Minister Bijan Namdar Zanganeh said that Iran would begin pumping natural gas to Oman by 2015, Times of Oman reported.

"Of course, discussions are taking place, in light of our need for more gas for our own industry and power generation. But, also, we are aware of the sanctions placed on the Iranians," Yousuf bin Alawi bin Abdullah, Oman's Minister for Foreign Affairs, said in a recent interview for Reuters referring to international curbs on trade with Iran over its nuclear programme.

"It will take time, but definitely if the whole thing is smooth we would require (investment) in that," he added.

Meanwhile, Salim Nasser Said Al Aufi, undersecretary of Oman's Ministry of Oil and Gas, told Times of Oman: "We need to agree exactly in which direction the pipeline is going.

"We need to finalise the feasibility study. We need to make sure that whoever is doing the study is not impacted by the sanctions on Iran, and so on. It is not an easy project."

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