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News number: 8710211677

18:45 | 2009-01-10

Economy

نسخه چاپي ارسال به دوستان

Iran Seeks 10% Share for Developing Phase 2 of Azeri Gas Field

TEHRAN (FNA)- Iran has submitted a $1.7 billion proposal for developing a part of the second phase of neighboring Azerbaijan's enormous Shakh-Deniz offshore gas deposit.



"We are interested in having at least a 10 percent share of the development of the second phase of this field," Iranian Deputy Oil Minister for International Affairs Hossein Noghrehkar Shirazi told MNA.

"Iran has given a $1.7 billion proposal to Azeri officials for the development of a part of the second phase of the Shakh-Deniz field," he said.

Azerbaijan hosts some of the world's biggest oil and gas developments. It sells output to the domestic market, and neighboring Georgia and Turkey via the Baku-Tbilisi-Erzerum pipeline.

Its largest gas field, Shakh-Deniz in the Caspian Sea, is co-led by BP and StatoilHydro. Azeri state energy company Socar, Russia's LUKOIL, France's Total and Iranian and Turkish firms are also partners in developing it.

Noghrehkar Shirazi said Iran, the world's fourth-largest oil producer, also had a 10 percent share in developing the first phase of Shakh-Deniz.

The second, $10-billion-phase has been estimated to come on stream between 2011 and 2012, but Noghrehkar Shirazi suggested he expected it would happen later.

"The second phase of the Shakh-Deniz field will go on stream in 2013 and 2014 and currently a lot of countries have asked to buy gas from the Shakh-Deniz consortium and Iran has been placed in the list of those who are interested," he said.

Ex-Soviet Azerbaijan increased its gas output in the first 11 months of 2008 by 42.7 percent to 20.91 billion cubic meters (bcm), the Baku government said last month.

Last winter, Iran suffered natural gas shortages when Turkmenistan halted gas exports of up to 23 million cubic meters a day to the Islamic Republic, citing technical problems. Turkmen exports to Iran resumed in April. The northern parts of Iran are far from the national grid.

Iran is among the best transit routes for oil and gas from central Asian states but the United States, which has not had diplomatic ties with Tehran since 1980, has been pushing for alternative export channels.

The United States is at loggerheads with Iran over the latter's progress in the field of civilian nuclear technology. Washington and its Western allies accuse Iran of trying to develop nuclear weapons under the cover of a civilian nuclear program, while they have never presented any corroborative document to substantiate their allegations. Iran denies the charges and insists that its nuclear program is for peaceful purposes only.

Tehran stresses that the country has always pursued a civilian path to provide power to the growing number of Iranian population, whose fossil fuel would eventually run dry.

Despite the rules enshrined in the Non-Proliferation Treaty (NPT) entitling every member state, including Iran, to the right of uranium enrichment, Tehran is now under three rounds of UN Security Council sanctions for turning down western calls to give up its right of uranium enrichment.

Tehran has dismissed West's demands as politically tainted and illogical, stressing that sanctions and pressures merely consolidate Iranians' national resolve to continue the path.

The UN sanctions address individuals and companies involved in nuclear- and arms-related activities without banning daily trade and non-nuclear investment.

But the US has imposed unilateral restrictions in particular on financial transactions and big investments.

Officials in Iran, which sits on the world's second largest reserves of both oil and gas, have dismissed US sanctions as inefficient, saying that they are finding Asian partners instead. Several Chinese and other Asian firms are negotiating or signing up to oil and gas deals.

In a last case, Iran signed gas deals worth $14 billion with Malaysia's SKS Group in early December, including a contract to build an LNG plant.

Following US pressures on companies to stop business with Tehran, many western companies decided to do a balancing act. They tried to maintain their presence in Iran, which is rich in oil and gas, but not getting into big deals that could endanger their interests in the US.

Yet, after oil giants in the West witnessed that their absence in big deals has provided Chinese, Indian and Russian companies with excellent opportunities to sign up to an increasing number of energy projects and earn billions of dollars, many western firms are increasingly showing interest to invest or expand work in Iran.

Some European countries have also recently voiced interest in investment in Iran's energy sector after a gas deal was signed between Iran and Switzerland regardless of US sanctions.

The National Iranian Gas Export Company and Switzerland's Elektrizitaetsgesellschaft Laufenburg signed a 25-year deal in March for the delivery of 5.5 billion cubic meters of gas per year.

The biggest recent deal, worth €100m ($147m, £80m), was signed by Steiner Prematechnik Gastec, the German engineering company, this year to build equipment for three gas conversion plants in Iran.