Iran to grant gas contracts to European firms

Reuters:

Iran will next week grant Total (TOTF.PA: Quote, Profile, Research), Shell (RDSa.L: Quote, Profile, Research) and Repsol (REP.MC: Quote, Profile, Research) upstream development contracts in the giant South Pars gas field in the Gulf, an Iranian state oil firm said on Saturday. READ MORE

Iran intends to use phases 11 and 13 of South Pars, which sits on the world's biggest reservoir of natural gas, to produce liquefied natural gas (LNG). The Islamic Republic hopes to export its first LNG shipments in 2009.

"The signings will be late this week," said a spokesman for the Pars Oil and Gas Company.

The Iranian working week starts on Saturday and ends on Wednesday or Thursday, depending on the institution.

Total is looking to develop phase 11 of South Pars to produce LNG, gas supercooled to liquid for loading onto tankers, in a project called Pars LNG.

Shell and Repsol are looking to do the same with phase 13, a project called Persian LNG.

Akbar Torkan, managing director of the Pars Oil and Gas Company, was quoted by the Abrar-e Eqtesadi financial daily saying the contract to develop phase 11 would be worth $1.2-$1.4 billion (687-802 million pounds).

The phase 13 deal would be worth $1.5 billion, he added.

Although it sits on the world's second biggest reserves of natural gas, Iran has been very slow to develop exports.

Qatar, which draws its gas from the same Gulf reservoir, is a long-established LNG exporter.

Iran has been reported to the U.N. Security Council for possible sanctions after failing to convince the world its atomic ambitions are entirely peaceful.

However, Iran has struck a defiant tone on its oil and gas industry, saying industrialised countries would never dare embargo hydrocarbons from OPEC's number two exporter while oil prices remain high.

Torkan also told the ISNA students news agency that Pars Oil and Gas Company had tendered phases 19-21 of South Pars.