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Fars News Agency, Iran
News number: 8707071405 18:59 | 2008-09-28
Economy
Iran Cautions UAE about Gas Deal
TEHRAN (FNA)- Iran said on Saturday it would sell gas to Crescent
Petroleum of the United Arab Emirates if the price previously agreed
was raised, cautioning that it would channel rich reserves into home
consumption otherwise.
"If the price in this contract is corrected the export of gas will go
through, otherwise the gas from the Siri region will be transferred
via a 32-inch, 270-km long pipeline under construction now from
Assalouyeh to the country's interior," Iranian Oil Minister Gholam
Hossein Nozari told FNA.
Siri is an offshore area of the Persian Gulf near the Salman gas field
that will supply Crescent if a deal is agreed. Assalouyeh is capital
of Iran's gas industry on the Persian Gulf coast.
The Crescent deal was initially signed in 2001 but hydrocarbon prices
have soared since then.
Elsewhere, Nozari also told FNA a Pakistani team would visit Iran in
days for talks on another gas export project that has been under
discussion for years.
Pricing has also delayed a deal to build a gas pipeline to Pakistan
and on to India, although testy relations between the Pakistani and
Indian governments have also held up talks.
Iran and Pakistan initiated a Gas Sales Purchase Agreement earlier
this year. India and Pakistan have also resolved all bilateral issues
including transit fee which saw New Delhi boycotting IPI pipeline
talks for about a year.
India has more or less agreed to give Pakistan a transit fee of $200
million per year, which is equivalent to $0.60 per million British
thermal unit for allowing passage of the pipeline through that
country.
India and Pakistan finally agreed in February 2007 to pay Iran $4.93
per million British thermal units ($4.67/GJ) but some details relating
to price adjustment remained open to further negotiation. There was a
breakthrough in the talks in April 2008 when Iranian President Mahmoud
Ahmadinejad visited Pakistan and India.
"In the course of the next two days a Pakistani team will come to
Tehran to follow up on negotiations," Nozari said.
"Iran's proposal in the ... pipeline is attaining a formula wherein
the final sale price to Pakistan would be set a year before delivery,"
he added.
Iran plans to start exporting gas to Pakistan in 2011. Iran has
completed half the pipeline, which can carry 110 million cubic meters
of gas a day, National Iranian Gas Company (NIOC) said in April.
The visit to Iran by the Pakistani delegation is aimed at a discussion
of various aspects of the project, including the volume of gas
exports, project time line, delivery point and pricing.
The oil minister also stated that obtaining finance, supplying pipes
and constructing the pipeline, which will pass through mountainous
areas, is likely to take 5-6 years.
The minister said that the new formula suggests pricing changes
consistent with market fluctuations.
According to the project proposal, the pipeline will begin from Iran's
Assalouyeh Energy Zone in the south and stretch over 1,100 km through
Iran. In Pakistan, it will pass through Baluchistan and Sindh but
officials now say the route may be changed if China agrees to the
project.
The gas will be supplied from the South Pars field. The initial
capacity of the pipeline will be 22 billion cubic meter of natural gas
per annum, which is expected to be later raised to 55 billion cubic
meter. It is expected to cost $7.4 billion.
Iran exports gas to Turkey and has a deal to sell 3 million cubic
meters of gas per day to neighboring Armenia in return for
electricity.
An Iranian official said this year the Armenian deal would come into
effect in October but said this depended on Armenia.
"We have completed the project on our part and we are fully prepared
to launch exports. It is Armenia's problem, as it lacks readiness to
receive gas at its end," Nozari said.
Iran also imports gas from Turkmenistan, to its northeast, so it can
supply a region of Iran that is difficult to reach from its national
pipeline grid and gas fields in the south.
Turkmenistan cut gas supplies to Iran last winter, a move Iranian
officials said at the time was because it wanted a higher
price. Supplies have since resumed but the two sides are still
discussing pricing.
"The gas price from Turkmenistan must be based on a win-win agreement
as both their resources must be preserved and our purchase should have
economic justification," Nozari said.
News number: 8707071405 18:59 | 2008-09-28
Economy
Iran Cautions UAE about Gas Deal
TEHRAN (FNA)- Iran said on Saturday it would sell gas to Crescent
Petroleum of the United Arab Emirates if the price previously agreed
was raised, cautioning that it would channel rich reserves into home
consumption otherwise.
"If the price in this contract is corrected the export of gas will go
through, otherwise the gas from the Siri region will be transferred
via a 32-inch, 270-km long pipeline under construction now from
Assalouyeh to the country's interior," Iranian Oil Minister Gholam
Hossein Nozari told FNA.
Siri is an offshore area of the Persian Gulf near the Salman gas field
that will supply Crescent if a deal is agreed. Assalouyeh is capital
of Iran's gas industry on the Persian Gulf coast.
The Crescent deal was initially signed in 2001 but hydrocarbon prices
have soared since then.
Elsewhere, Nozari also told FNA a Pakistani team would visit Iran in
days for talks on another gas export project that has been under
discussion for years.
Pricing has also delayed a deal to build a gas pipeline to Pakistan
and on to India, although testy relations between the Pakistani and
Indian governments have also held up talks.
Iran and Pakistan initiated a Gas Sales Purchase Agreement earlier
this year. India and Pakistan have also resolved all bilateral issues
including transit fee which saw New Delhi boycotting IPI pipeline
talks for about a year.
India has more or less agreed to give Pakistan a transit fee of $200
million per year, which is equivalent to $0.60 per million British
thermal unit for allowing passage of the pipeline through that
country.
India and Pakistan finally agreed in February 2007 to pay Iran $4.93
per million British thermal units ($4.67/GJ) but some details relating
to price adjustment remained open to further negotiation. There was a
breakthrough in the talks in April 2008 when Iranian President Mahmoud
Ahmadinejad visited Pakistan and India.
"In the course of the next two days a Pakistani team will come to
Tehran to follow up on negotiations," Nozari said.
"Iran's proposal in the ... pipeline is attaining a formula wherein
the final sale price to Pakistan would be set a year before delivery,"
he added.
Iran plans to start exporting gas to Pakistan in 2011. Iran has
completed half the pipeline, which can carry 110 million cubic meters
of gas a day, National Iranian Gas Company (NIOC) said in April.
The visit to Iran by the Pakistani delegation is aimed at a discussion
of various aspects of the project, including the volume of gas
exports, project time line, delivery point and pricing.
The oil minister also stated that obtaining finance, supplying pipes
and constructing the pipeline, which will pass through mountainous
areas, is likely to take 5-6 years.
The minister said that the new formula suggests pricing changes
consistent with market fluctuations.
According to the project proposal, the pipeline will begin from Iran's
Assalouyeh Energy Zone in the south and stretch over 1,100 km through
Iran. In Pakistan, it will pass through Baluchistan and Sindh but
officials now say the route may be changed if China agrees to the
project.
The gas will be supplied from the South Pars field. The initial
capacity of the pipeline will be 22 billion cubic meter of natural gas
per annum, which is expected to be later raised to 55 billion cubic
meter. It is expected to cost $7.4 billion.
Iran exports gas to Turkey and has a deal to sell 3 million cubic
meters of gas per day to neighboring Armenia in return for
electricity.
An Iranian official said this year the Armenian deal would come into
effect in October but said this depended on Armenia.
"We have completed the project on our part and we are fully prepared
to launch exports. It is Armenia's problem, as it lacks readiness to
receive gas at its end," Nozari said.
Iran also imports gas from Turkmenistan, to its northeast, so it can
supply a region of Iran that is difficult to reach from its national
pipeline grid and gas fields in the south.
Turkmenistan cut gas supplies to Iran last winter, a move Iranian
officials said at the time was because it wanted a higher
price. Supplies have since resumed but the two sides are still
discussing pricing.
"The gas price from Turkmenistan must be based on a win-win agreement
as both their resources must be preserved and our purchase should have
economic justification," Nozari said.