TEHRAN (FNA)- Iran is seeking to use gas processing facilities in Oman to export its vast gas reserves.
Iranian officials will hold talks in Tehran next week with their Omani counterparts to discuss a natural gas deal. The talks follow a trip by Iranian Oil Minister Gholam Hossein Nozari to Oman earlier this week.
The scheme would involve piping gas from a shared reservoir off the northeast of the Musandum Peninsula to Oman for conversion into liquefied natural gas (LNG), which is compressed and frozen for export to the industrialized world. Part of the gas production would also be used domestically in Iran and Oman as well.
The talks are not connected to the Salman field, which the UAE is hoping to exploit with Iran to send gas to Sharjah through a pipeline built by Crescent Petroleum.
The Oman deal represents Iran’s best hope to get involved in the global LNG trade. Iran has the world’s second-largest reserves of gas after Russia.
Market analysts believe that the scheme to export gas through Oman would be a boon for both sides.
In late May, Ali Khayrandish, the managing director of Iran LNG, told a conference in Abu Dhabi that the country would be ready to export its first LNG cargo by the end of 2010. Yet, Iran’s under-construction LNG facilities are not enough for exporting Iran’s vast reserves.
Oman, which has built expensive LNG facilities but is now suffering from a shortage of gas, is looking for new sources.
Meantime, a joint venture could provide for technological transfer and allow Iranian personnel to gain experience in the global LNG trade.
Manouchehr Takin, an analyst at the Centre for Global Energy Studies in London, said the negotiations were “a good sign”, and a chance for Oman and Iran to increase their economic ties.
He noted that of all the Persian Gulf Cooperation Council (PGCC) countries, Oman had historically been closest to the region’s neighbor to the north. Those historical ties might induce Oman to shrug off American pressure and sign a deal, he said.
The two countries signed a broad agreement to cooperate on oil and gas production more than a year ago, and that’s a good platform for future mutual cooperation between Iran and Oman.