x Abu Dhabi, UAEFriday 28 July 2017

Oman issues urgent gas plea to Iran

Region The talks relates to plans for the development of Iran's Kish gasfield, located in the Gulf, near the Iranian resort island of the same name.

Oman, which is running short of gas to fuel power plants and fulfil export commitments, has made an urgent request to Iran for gas supplies during the first official visit of the Omani sultan to the Islamic republic in 30 years. The talks relates to plans for the development of Iran's Kish gasfield, located in the Gulf, near the Iranian resort island of the same name. "Oman has requested to develop the Kish gasfield," said Seyyed Reza Kasaeizadeh, the managing director of the National Iranian Gas Export Company, according to the Tehran-based Mehr news agency. "The negotiations are underway and the two sides have not yet reached any agreement on the exact amount of investment in the Kish gasfield."

A consortium of Iranian companies and a Malaysian firm have signed a US$2 billion (Dh7.34bn) agreement on the first phase of a project to develop the giant field, and would finalise the deal by the end of this month, the Iranian oil ministry's official Shana new agency recently reported. Naji Saadouni, the head of Iran's Petroleum Engineering and Development Company, told Shana that Iran needed $6bn of investment to develop all three phases of Kish, which is estimated to hold at least 36 trillion cubic feet of exploitable gas.

In April, Oman and Iran signed an agreement for joint development of the gasfield at an estimated cost of $7bn to $12bn, but the deal has not been finalised. Since signing the accord, which proposed supplying Iranian gas to Oman's underutilised gas liquefaction facilities, Tehran has raised an alternative proposal to supply Kish gas to its domestic market. Iran sits on the world's second biggest gas reserves, but has been slow to develop them due to US-led sanctions against the country and, according to analysts, its own government's mismanagement of the economy. As a result, like Oman and most other Gulf states, Iran does not produce enough gas to meet domestic demand for the fuel. A recent agreement to increase purchases of Turkmen gas by 75 per cent could make Iran a net importer.

The Omani ruler, Sultan Qaboos bin Said, arrived in Tehran today on a three-day visit to hold talks on regional issues and discuss ways to expand political and economic ties between the two countries that straddle Strait of Hormuz. About 20 per cent of the world's crude oil supply is shipped from the Gulf through the strategic choke-point. tcarlisle@thenational.ae