Iran will not export gas under a deal with a United Arab Emirates venture until it has secured a better price, Iran's oil minister said on Monday after a UAE firm said in May it hoped to receive gas this year.
The UAE's Dana Gas and one of its shareholders, Crescent Petroleum, own a venture that was set up to import gas from Iran starting from mid-2006. But the deal has run into delays due to a dispute over pricing.
"A review of the articles of the contract shows that the price for the contract is not suitable and we will not export any gas until the pricing and contractual problems are removed," Oil Minister Kazem Vaziri-Hamaneh was quoted by Iran's official IRNA news agency as saying.
Rashid Saif Al Jarwan, general manager of Dana, which sells gas to utilities and other industrial users, had said the first deliveries of gas would start this year. He said delays were caused because Iran was still completing export facilities.
Iranian politicians have complained that Iran would lose out from the deal under the terms initially agreed because gas prices have risen sharply since the contract was struck.
Government spokesman Gholamhossein Elham also told a news conference on Monday that the deal was being reviewed.
"The government insists on reviewing the contract and directing it towards a legal framework while preserving the national interests of the country," he said.
In his comments this month, Jarwan said a pipeline to receive the Iranian gas was capable of handling up to 1 billion cubic feet of gas per day and that the current agreement was for 600 million cubic feet per day.
Demand for energy in the Gulf region has been rising rapidly due to population growth and an economic and construction boom on the back of record oil revenues.
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