1.02 AM Friday, 23 February 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 05:31 06:45 12:35 15:51 18:20 19:34
23 February 2024

Iran, Total to sign $5bn gas deal: report

Iran and French petroleum firm Total have been reported to sign a $5-billion deal in March to develop a natural gas field. (AFP)

Iran and Total of France are to sign a much-delayed deal to develop a key natural gas field, a report said.

The Mehr news agency quoted National Iranian Oil Company managing director Seyfollah Jashnsaz as saying on Wednesday that the $5 billion (Dh18.4 billion) deal would be signed by March 20 to develop the phase 11 of the South Pars gas field located in the Gulf.

Iran has the world's second largest natural gas reserves.

"The development of the South Pars gas field phase 11 in the upstream sector and the construction of an LNG (liquified natural gas) plant in the downstream sector will be Total's responsibility," Jashnsaz said.

The development of the gas field has been pending for nearly five years since an initial agreement to undertake the project was signed in 2004 between Total, National Iranian Oil and Petronas of Malaysia.

The delay was caused by a rise in cost of the project and international sanctions on Iran for pursuing sensitive nuclear activities. Western governments have pressed international firms to cut ties with Iran. The West accuses Iran of seeking nuclear weapons, a charge vehemently denied by Tehran.

In July 2008 Iranian media reported that Total had withdrawn from the project, saying investments in the Islamic republic were "politically risky."

On Wednesday Jashnsaz said Total had "never cut its relations and cooperation with NIOC."

The South Pars field has around 500 trillion cubic feet (14 trillion cubic metres) of gas, which represents about 8 per cent of world reserves.