Korea Gas Corporation (KOGAS) may play a leading role in the construction of a proposed deep-sea gas pipeline that links Iran and Oman. Iran has been pushing forward the project to export its natural gas.

South Korean and Iranian authorities are in talks over the possibility that KOGAS may lead the project, and the project owners and KOGAS could sign either a memorandum of understanding or a framework agreement in April or May, according to local sources on Tuesday.

The iconic project is being led by Iran’s National Iranian Oil Company (NIOC) and National Iranian Gas Export Company (NIGEC).

The construction will be conducted in three phases to cover the Iran-the Strait of Hormuz section, the strait section and the Oman-LNG terminal section.

Korea seeks its role in the construction of a deep-sea pipeline in the strait, which is believed to be the most challenging in technology. The construction is estimated to cost $1.5 billion. Natural gas produced from gas fields in South Pars, Iran will be sent to the Sohar industrial port complex in Oman via the pipeline and then to the rest of the world through vessels departing from LNG terminals there.

Iran wants to use well-equipped terminals and other logistics facilities in Oman, while Oman wants to import gas from Iran to increase its gas output.

The project began to be studied 10 years ago and in 2013 Iran and Oman agreed to push for the plan. But the project was almost aborted due to intensified sanctions by the U.S. on Iran.

The project was revived when sanctions were lifted last January. Iran’s Oil Minister Bijan Zanganeh met his Oman counterpart Mohammed bin Hamad Al Rumhy last January and agreed to conduct the project again.

Oman wants to import natural gas from Iran from as early as 2019. South Korea and KOGAS are willing to cover project operation in addition to financial support. They are reviewing another option to redirect part of the gas to Korea in return for lower tolls, according to the sources.

An industry watcher says the large-scale project, if realized, would be significant in that Korea builds a pathway for Iran’s export of natural gas after economic sanctions are lifted.

Iran boasts the second largest proven natural gas reserves in the world.

By Park Yong-bum, Seo Dong-cheol, Chang Young-seok

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