Bahrain and Iran have overcome a diplomatic dispute, but talks on the price of gas imports from Iran will still likely be lengthy, Bahrain's minister of Oil and Gas Affairs said on Tuesday.

The non-Opec producer signed a preliminary agreement in 2008 with Tehran to import up to 1 billion cubic feet per day (cfd) of natural gas from the Islamic republic, but the two countries have yet to agree final terms.

Iran has signed many preliminary deals to export gas but has not yet pumped any to its southern Gulf neighbours.

'Negotiations on gas always take a long time because we have to agree on a price,' Bahrain's minister Abdul-Hussain bin Ali Mirza told Reuters on the sidelines of an Arab energy conference in Doha.

Talks were interrupted for several months last year by a diplomatic spat, after an Iranian official reportedly made comments questioning Bahrain's sovereignty.

Imports would be between 500 million cfd to 1 billion cfd, Mirza said.

Iran's plans to become a major gas exporter have been frustrated as sanctions block its access to the technology needed to build facilities to liquify gas and export it on specially designed tankers.

Bahrain, like its Gulf neighbours, expects demand for natural gas to rise rapidly as a petrodollar-fuelled boom in the region feeds its economy.

Bahrain aims to boost its supply from its gas field to 2.7 billion cfd from 1.7 billion cfd, said Mirza. It also aims to increase crude output from the field to 100,000 barrels per day (bpd) from 32,000 bpd in seven years, Mirza said.

Last year, US based Occidental Petroleum and the UAE's Mubadala Development Company agreed to invest $15 billon to develop the Bahrain field.

Under the terms of the production agreement, Los Angeles-based Occidental holds a 48 per cent stake, with Mubadala holding 32 per cent and the Bahrain oil and gas authority holding the rest.

'From the amount of the production that these companies manage to increase, they will have a less than a 10 per cent share of the new gas and oil, so this is a very attractive deal for us,' said Mirza.

There are a number of deep gas projects that are also taking place, where Bahrain hopes to find new reserves, Mirza said.-Reuters