Global Arab Network | New deal - Iran to export gas to UAE

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New deal - Iran to export gas to UAE

Global Arab Network - - George Haddad

Sunday, 13 September 2009 20:57

A new deal to export Iranian gas via a foreign company to the United Arab Emirates has been struck, it was announced here on Sunday.
Iranian News Agency (IRNA) quoted Director General of the National Corporation for the export of gas Reza Kasaei Zadeh as saying that the new agreement provides for the sale of gas from an Iranian field in the Gulf water and its export to the UAE.

The agreement extends over a 25-year-period and provides for the production of about three billion cubic meters of gas a year, Zadeh said, pointing out that the two sides would develop and share the master agreement to start working in the extraction of gas during the next six months.

He noted that the foreign company, which he did not disclose, would carry out development and gas extraction from the newly-created field before the gas is shipped to the UAE.

The agreement came a month after Kasaeizadeh said that three Emirati companies are seeking to buy Iranian natural gas.

"At least three UAE companies have submitted their requests and announced their readiness to import gas from Iran based on international prices," Mehr news agency quoted Kasaeizadeh as saying in July.

Kasaeizadeh went on to say that Iran and Crescent would start a new round of talks to discuss a deal that would allow the UAE gas firm to import Iranian gas.

The National Iranian Oil Company (NIOC) and Crescent signed a deal in 2001 to transport natural gas through a 90-mile pipeline from the Salman field to Lavan Island in the Persian Gulf.

However, Iran increased its initially proposed price, citing a sharp rise in international gas prices since the time the contract was agreed upon between the two countries.

The original agreement envisaged a contract for 25 years starting in 2005. Iran's state auditors said Iran could lose as much as $21 billion over the 25-year agreement if gas prices did not meet market conditions.

Based on the agreement, Iran was to export 195 million cubic feet of gas to the Persian Gulf state in 2005-2006, followed by 230 million cubic feet, 300 million cubic feet and 350 million cubic feet in the following three years.

Iran has stressed gas exports to the UAE will only begin after a new price is set in the contract.

In April, Crescent offered a new price to import Iran's gas, taking a major step toward finalizing the long-delayed gas deal.

Executive Director of the Crescent Petroleum Group Majid Hamid Ja'far says the UAE firm had agreed to increase the price it would pay for Iranian gas after several rounds of negotiation with Iranian officials

Global Arab Network

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