Saudi Arabia is planning Oman pipeline, says Total CEO

• Patrick Pouyanne comment to investors
• Aramco seeking new oil export routes
• Thought to be at feasibility study stage

Saudi Arabia is developing a new oil pipeline to Oman’s coast as it seeks alternative routes for crude exports, according to an industry executive.

Patrick Pouyanne, the chief executive of French oil giant TotalEnergies, said the country had “begun to work” on a pipeline to Duqm, which is home to Oman’s largest oil refinery.

He made the comment during a three-hour broadcast from the company’s investor day in New York on Monday.

Pouyanne did not provide further details or indicate how far the project had progressed. TotalEnergies has been contacted for comment.

Pipeline speculation

Analysts have speculated about pipeline routes across the Gulf since the US-Iran war began on February 28.

Rahul Choudhary, vice president of upstream research at consultancy Rystad Energy, told AGBI the Duqm pipeline is understood to be at the feasibility-study phase.

It is expected to be approximately 1,000 kilometres with an estimated development cost of up to $7 billion, Choudhary said.

The conflict has disrupted shipping in the Strait of Hormuz, a chokepoint through which around a fifth of the world’s energy supplies flowed each day before the war.

Saudi Arabia had harnessed its East-West pipeline to the Red Sea coast to avoid Hormuz, but threats of a blockade have slowed ship traffic and a drone attack on a pumping station last month caused the pipeline to shut temporarily.

It has since reopened and Saudi Arabia’s exports have reached their highest level since the Iran war began, according to maritime intelligence provider Kpler.

But Amin Nasser, the chief executive of state-backed oil company Aramco, told Nikkei Asia last week that Saudi Arabia was seeking to establish new export routes.

Establishing a pipeline to Oman could secure access to the Indian Ocean, from where Saudi Arabia could serve its customers in Asia.

A possible destination, Choudhary added, is likely to be Ras Markaz, where Oman’s state-backed oil firm OQ is planning to acquire offshore storage vessels and lease them out.

“Ras Markaz is roughly 650-700 km from Iran, which reduces the risk of Iranian attacks, making the port a viable alternative,” Choudhary said.

He added that Nasser had said the company was conducting feasibility and engineering studies to establish alternative export routes: “We believe that pipeline to Duqm is likely one of them.”

• Iran’s Hormuz hold is loosening but the war still simmers
• Qatar urges diplomacy as US and Iran claim Hormuz control
• Saudi oil exports hit wartime high after pipeline flows resume

The war has made access to pipelines an issue of vital importance for Gulf states.

The UAE has harnessed a pipeline to Fujairah, which has a maximum capacity of 1.8 million barrels per day and bypasses Hormuz, to keep exports flowing, as well as using ship-to-ship transfers.

It is speeding up construction of a second pipeline running parallel to the first, which should double capacity and start operations next year.

TotalEnergies has said it is willing to provide investment for this project – and restated its willingness to participate at the investor presentation on Monday – but there has been no public announcement about any investment or what form this will take.

The $197 billion company is also supporting efforts to build pipelines in Iraq, whose only current access to shipments outside the Arabian Gulf is a pipeline to Turkey that transports around 250,000 barrels of oil per day.

This is around 10 percent of the 2.6 million barrels per day that Iraq ships in total.

Saudi Aramco declined to comment. The Ministry of Energy was contacted for comment.