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A projected major Iranian-Omani project has the potential to change the political dynamic of the Persian Gulf.
While since 1979 the Arab states on the western side of the Persian Gulf have watched events in Iran after the establishment of the Islamic Republic with alarm, fearing that it could spread unrest amongst its own Shiite populations. Oman is now considering a project across the historic Straits of Hormuz to construct an undersea natural gas pipeline to transmit Iranian energy westwards.
According to Iran's Deputy Oil Minister Javad Oji, Iran and Oman have signed an initial contract covering the general terms of the natural gas transit arrangements, with the final contract to be signed by the end of the current Iranian calendar year in March, 2012, according to the official website of the Iranian Oil Ministry.
Oji, who is also the managing director of the National Iranian Gas Company (NIGC), said that Iran's IGAT-7 Seventh Gas Trunkline has been extended up to Iranshahr city in Sistan-Baluchestan province and will be extended to Chabahar, from where it would then go towards the Iran-Pakistan border, where another line will transfer the gas to Oman.
The project builds upon a 2009 agreement under which Iran and Oman signed a deal to jointly develop an underwater 120-mile pipeline from Iran to Musandam and Sohar in Oman.
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com