Iran Sets Mar Deadline on Total's Gas Field Invest
TEHRAN Mar 07, 2007 (Dow Jones Newswires)
French energy major Total SA (TOT) has until the end of March to decide on its investment in the upstream development of phase 11 of the South Pars gas field in the Persian Gulf, an Iranian Oil Ministry official said Wednesday.
Akbar Torkan, managing director of the state-owned Pars Oil and Gas Co., which is affiliated with state-owned National Iranian Oil Co., or NIOC, was quoted by the semi-official Fars news agency as saying Total hasn't as yet delivered its final investment decision in the Liquefied Natural Gas-related project.
"Total will only have a chance until the end of the current month to announce its final decision in connection to investment on Phase 11 of the South Pars," Torkan was quoted as saying.
The NIOC signed an LNG framework deal with a consortium made up of Total and Malaysia's Petronas in late 2004. Pars is one of four projects linked to the production of LNG earmarked for export. The Pars LNG project, hinged to the upstream development of phase 11 of the South Pars gas field in the Persian Gulf, is owned 50% by NIOC with 30% and 20% held by Total and Petronas respectively.
Torkan didn't commit himself on whether or not the Total deadline would be extended.
"Making a decision in connection to the renewal of the deadline...will be with NIOC," he said.
He added a delay in the investment decision would also put back exploitation and development of the gas field.
Iran owns the second largest reserves of natural gas in the world, estimated at 27 trillion cubic meters, behind only Russia. Around 60% of the Islamic republic's reserves lie in South Pars, a field jointly owned with the state of Qatar which itself is already exporting large quantities of LNG from the reservoir. Iran has said it will develop all 28 projected phases of South Pars by 2012.
Torkan didn't mention the contract value on phase 11, but has previous put the cost of its development at around $1.4 billion, which Total tried to raise. Iran intends to use gas from phases 11 and 13 to produce LNG and aims to begin exporting by 2009, with China and India as initial destinations.
The NIOC signed a $4.3 billion deal with Spain's Repsol YPF SA (REP) and Royal Dutch Shell PLC (RDSB) on the upstream development of phases 13 and 14 in January.
Total's head of exploration and production said last month that the company isn't far from deciding whether to invest in Pars, but earlier this month Total Chairman Thierry Desmarest said a final decision is being delayed by the state of Iran's international relations.
The U.S. and its allies are currently trying to put together new sanctions on Iran as follow-up to a U.N. Security Council resolution that imposed punitive trade and economic sanctions for Iran's refusal to suspend its nuclear enrichment program. Iran says the program is for peaceful purposes.
Copyright (c) 2007 Dow Jones & Company, Inc.
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