Saturday, September 18, 2004

Gulf Daily News: Iran on verge of deal with Total

Gulf Daily News: "Iran on verge of deal with Total

VIENNA: Iran is on the verge of signing a liquefied natural gas deal with Total and Malaysia's Petronas, as the country seeks to kick-start its LNG business.

"It is very close," Mehdi Hosseini, senior vice-president at Iran's state-owned National Iranian Oil Company (NIOC), said yesterday. "It will be similar to the Shell deal."

NIOC on Thursday signed a framework deal with Royal Dutch/Shell and Spain's Repsol to develop LNG - gas super-cooled to a liquid for loading onto tankers.

Iran has the world's second largest reserves of natural gas, but lagged behind in building LNG facilities. By contrast, tiny neighbour Qatar has several multi-billion ventures up and running.

Total and Petronas have long been in negotiations to develop phase 11 of Iran's giant South Pars natural gas field.

The two firms earlier this year agreed with Iran to form a production company Pars LNG, half-owned by NIOC with Total holding a 30 per cent share, and Petronas 20pc.

A framework deal for the $2 billion LNG project now looks imminent. "If things go well, we can talk about weeks," Christophe de Margerie, Total's head of exploration and production, said.

Iran hopes the two international projects, together with a third venture being developed by Iran alone, will install initial production capacity of 18m tonnes a year and then expand to 30m tonnes a year, Hosseini said.

Iran's international partners will be responsible for marketing the gas, Hosseini added.

Frosty relations with the US, the world's biggest energy importer, have delayed Iran's LNG projects. Shell said it will take two years for a final decision on whether to proceed with its venture."

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