Iran, Oman ink $7b gas dealThe key question now is what the pricing structure will be, and volume.
Tehran Times Political Desk
TEHRAN, Apr. 21 (MNA) – Iran and Oman on Monday signed a $7 billion joint investment agreement on development and exploitation of the Kish gas field in southern Iran.
“The document which was inked on joint investment for development and exploitation of (Kish) gas field is valued at $7 billion which can increase to $12 billion,” First Vice President Parviz Davudi told reporters in a press conference with Deputy Prime Minister of the Sultanate of Oman Fahd bin Mahmud al-Said.
Earlier in a meeting, Iranian and Omani officials signed memoranda of understanding on cooperation in tourism and gas export. The two countries’ foreign ministers also signed an agreement on Iran-Oman strategic cooperation.
The Kish field is big, with Iranian NIOC reports of in-place gas of around 50Tcf and recoverable gas of 36Tcf. The daily production volume I'd expect to be around the typical Iranian standard gas development phase which is around 2bcf/d, with half going to Iran and half to Oman. [for comparison, that would mean Oman would get around half Oman's total demand right now, and 5 times what they are getting from Qatar via Dolphin]. That would leave enough gas for a Kish Phase 2, possibly with someone else (like India and PetroPars perhaps?)
But at what price has Oman secured the gas? That was always the issue with Iran in previous negotiations, also in the Iranian's negotiations with India and Pakistan. To some extent, if the deal is well structured on investment recovery it almost doesn't matter. Oman needs the gas. Anything less than $5 per Mscf would be outstanding (and unlikely). It also depends on the condensate deal too. I'd love to read the contract...
But, carping aside, a signed gas deal is cause for celebration. We can worry about getting it done and the price to be paid later...
Kish Gas Field
general Iran gas news