Emirates is Tehran’s new gas competitor in the Delhi market

According to the exclusive report of Energy Press, in recent years, the transfer of Iranian gas to Oman and then to India through the submarine pipeline has always been discussed. But various factors such as sanctions on Iran and the high cost of this project prevented its implementation. Reza Noshadi, CEO of Iran Gas Engineering and Development Company, announced two weeks ago the construction of the Minab pipeline to Mount Mubarak near Jask with the aim of exporting Iranian gas to Oman in 1402. This pipeline, whose contract was signed in 2013, with a length of 400 square kilometers, is supposed to pump about 28 million cubic meters of gas from Iran to Oman for a period of 15 years.

Oman’s Energy Minister Salem Al-Awfi also said in an interview with Athir newspaper that Tehran and Muscat have agreed to form a technical team to review the progress of the Iran-Oman gas pipeline project. This project is not a new thing, and the negotiations regarding it have been going on for a long time, and during his recent trip to Iran, he seriously addressed this issue and talked about the method of selling Iran’s gas. Iranians have progressed in completing the pipeline construction project and achieved good results.

Iran and Oman pipeline

Iran-Oman gas pipeline is a big energy and engineering project. According to the announcement of the National Iranian Gas Company, this pipeline will send 28 million cubic meters of Iranian natural gas daily to Oman through the port of Mount Mubarak in the south of Iran at an estimated cost of 1.2 billion dollars.

Mount Mubarak is located in the Oman Sea and outside the strategically vital Strait of Hormuz, through which about 30% of the world’s oil and gas passes through the sea. This pipeline is laid in waters with a depth of 1000 meters and reaches the port of Sohar in the north of Oman.

This gas is then converted into LNG for export or can be used in Oman, and in recent years its reserves have dwindled, hampering its economic growth. According to experts, the gas export pipeline from Iran is designed to support Oman’s economic diversification project. Oman’s gas consumption has been increasing rapidly due to this diversity as well as electricity production, and they have been facing a serious gas shortage in recent years.

However, oil and gas executives privately suggest that recent gas discoveries in Oman may reduce the pipeline’s business case in the medium and long term. But there are strong motivations to realize this project. Because it connects Iran to both sides of the Persian Gulf. There is another factor behind the pipeline. Oman wants to use its position on the other side of the Strait of Hormuz and introduce itself as an outlet for oil and gas from other countries.

This strait has been the focal point of tension between Iran and the United States many times. Oman’s ports are located outside this potential point in the Indian Ocean, and in recent years we have seen that the United Arab Emirates and Saudi Arabia also consider pipelines to it as a way to bypass the strait and its potential dangers. However, such ideas have not yet come to fruition, but the overall strategic logic remains unquestioned.

India’s dire need

Due to the rapid economic growth of India, the country is hungry for oil and gas imports. Therefore, the gap between India’s gas consumption and production is increasing from 12.2 billion cubic meters in 2010 to 31.3 billion cubic meters in 2021, while it is expected to increase to 92 billion cubic meters by 2050. Middle East LNG exports are expected to increase from 128 billion cubic meters in 2021 to 248 billion cubic meters in 2050, while India’s imports are expected to increase from 32.4 billion cubic meters to 155 billion cubic meters in 2050. This is a great opportunity for oil and gas exports from Persian Gulf countries like Iran and Oman to expand and benefit from the deficit of large Asian countries.

In this regard, in 2014, India started formal negotiations on a deep-sea gas pipeline with Iran and Oman. Salman Khursheed, the Minister of Foreign Affairs of India at the time, met with Yousuf bin Alavi bin Abdullah, the Minister of Foreign Affairs of Oman and Javad Zarif, the Minister of Foreign Affairs of Iran at the time. This project, which was discussed for the first time at this high level, is likely to cost around 5 billion dollars. This undersea pipeline was proposed as an alternative to the proposed Iran-Pakistan-India gas pipeline, which ran into several problems after Pakistan failed to fulfill its commitments on time.