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Oman gas deal suffers the slows.

Although Iran last month said the gas pipeline to Oman is all set to go, the Omani government last week said the feasibility study of the pipeline hasn't even been put up for bid.

Iranian Oil Minister Bijan Namdar-Zanganeh was all upbeat about the pipeline last month when he talked with reporters and spoke of the project as if pipe laying would start any minute.

But that's not what Oman says about the proposed 260-kilometer (160-mile) pipeline to carry Iranian natural gas to Oman.

"[Work for] the feasibility study at the moment is being kicked off. We have not finalized the tender regarding the feasibility study. We need to do the feasibility study first," Salim Nasser Said Al Aufi, undersecretary of the Ministry of Oil and Gas, told the Times of Oman.

The agreement for the purchase of around $60 billion worth of natural gas from Iran in the next 25 years, with the project including laying a $1 billion gas pipeline to Oman across the Gulf, was signed during the visit of President Rohani to Muscat in March.

The proposed pipeline would connect the Iranian province of Hormuzgan to Sohar in Oman. The agreement was signed as a follow-up to a Heads of Agreement signed during Sultan Qaboos bin Said's visit to Tehran in August 2013. A Heads of Agreement is not a contract or even of the standing of an MOU. Essentially, it is just an agenda of things to be discussed and decisions that need to be made and work that must first be accomplished.

At the time, Namdar-Zanganeh said Iran would start pumping natural gas to neighboring Oman by 2015. That's clearly not in the cards now.

Asked about the latest developments in the project, al-Aufi said, "We need to agree exactly in which direction the pipeline is going. We need to finalize 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. So, it is not an easy project."

Oman's Minister of Oil and Gas Mohammed bin Hamad Al Rumhy had earlier said that the Iran-Oman gas pipeline project should be completed by the end of 2017, according to news agencies.

In June, Kuwait became the third county in the Persian Gulf to announce plans to buy natural gas from Iran.

The UAE became the first country to sign up to buy Iranian gas a decade ago. But that deal is snagged over disagreements and the contract has gone to international arbitration.

Meanwhile, in Tehran, Zanganeh said Iran and Oman had agreed on the quantity of gas to be sold by Iran to Oman--20 million cubic meters a day. But that was a one-third reduction from the 30 million that Iran's state news agency reported was agreed to in March.

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Title Annotation:Economy: Money and its impact
Publication:Iran Times International (Washington, DC)
Geographic Code:7IRAN
Date:Sep 5, 2014
Previous Article:Vigil.
Next Article:Petrochemical exports only up 6% despite sanctions lift.

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