Iran oil minister: No supplies to Dana Gas without better price deal
Posted: 24 December 2007
 Send this article
 Print this article
Iran has approved plans to divert to the domestic market gas supplies promised to Crescent Petroleum, unless the Sharjah-based company agrees to pay a higher price, according to the Iranian oil minister.
In 2001, Crescent signed an agreement with the state-owned National Iranian Oil Company (NIOC) to import gas from the offshore Khuff reservoir associated with the Salman oilfield Salman field to supply customers in the United Arab Emirates .
 However, there are calls from Iranian officials to cancel the deal because of what they claim are giveaway prices negotiated with Crescent.
Iran Oil Minister Gholamhossein Nozari said NIOC had already carried out early engineering and design work on an alternative pipeline to send the gas to the port of Assaluyeh . The Khuff gas may be used for gas re-injection in Iran .
" Iran 's Supreme Economic Council has approved the plan to use the gas domestically. We are already working on the pipeline. If we do not reach an agreement with Crescent for a higher price, Salman gas will be sent to Assaluyeh," Nozari told the Norwegian Oil Weekly Upstream.
The statements put pressure on Crescent to give in to Iran 's demands for improved rates. NIOC officials said that the first supplies from Khuff should start to flow in the second half of 2008, which leaves time to revise the price formula with Crescent.
Except for a gas production platform and living quarters, all elements of the Salman-Khuff field development are complete. It will take six months for the two platforms to be completed, according to NIOC officials.
The contract to send gas to the UAE was signed following long negotiations between NIOC subsidiary Petroiran Development Company (Pedco) the operator of Salman-Khuff and Crescent, when oil and gas prices were low.
Iranian gas supplies would be marketed in the UAE by Dana Gas, in which Crescent is the largest shareholder.
Iranian official sources claim the agreement calls for the supply of 116 billion cubic metres of gas to the UAE over 25 years, with the initial sale of 330 million cubic feet a day rising to 600 mcfd in Sharjah's Hamriyah Free Zone. Iran 's gas sales were originally scheduled for January 2005. |
