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Iran MPs seek end to UAE Crescent gas deal

Tehran, November 3, 2009

Iran may revoke a deal to export gas to the United Arab Emirates because of a dispute over pricing, Iranian parliamentarians said on Tuesday.

UAE-based Crescent Petroleum said in July it was seeking international arbitration for the failure of Iran's state oil firm to fulfil the contract.

The National Iranian Oil Company (NIOC) has yet to complete testing facilities at its offshore Salman field which should have pumped the Islamic Republic's first gas exports to the UAE in December 2005.

"In the opinion of some parliamentarians this contract will have to be revoked and its international ramifications accepted," Iranian student news agency ISNA quoted parliament's energy committe spokesman Emad Hosseini as saying.

"The government and the oil ministry must provide parliament with the needed explanation on the Crescent deal," he said.

The report was the first comment on the issue since Iran appointed a new oil minister, Massoud Mirkazemi, in September.

Previous minister Gholamhossein Nozari threatened to take the gas back to the mainland if a new agreement could not be reached on price. Crescent says the contract with its agreed price is internationally binding.

NIOC and Crescent signed the 25-year contract in 2001, with a price linked to oil. As oil rallied in following years, some officials and politicians in Iran called for a revision to the price formula and blamed the price dispute for delivery delay.

Crescent says the two sides provisionally agreed on a revised price in September last year, but that it has heard nothing from NIOC on the price since.

The UAE and Iran are in dispute over islands the UAE accuses Iran of occupying and the UAE backs Western countries in their dispute with Iran over its nuclear energy programme. -Reuters




Tags: Iran | gas | Crescent |

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