The MoU sets out the general conditions for the gas sales agreement. It provides for OOC to deliver the gas by a new pipeline, which will run to the UAE/Omani border from the Fahud-Sohar pipeline. For its part, DEL will build a short pipeline from the border to connect with the Al-Ain-Fujairah gas line, which is being built by India’s Dodsalunder a $55 million contract awarded in mid June.

The Omani gas will be replaced in 2006/07 by Qatari gas, which will be delivered under the Dolphin project.

The establishment of a gas pipeline link between the UAE and Oman represents a further step in the creation of GCC gas grid. It also raises the possibility of Oman importing gas at a future date.