- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 05:25 06:43 12:11 15:09 17:32 18:50
Iranian natural gas could finally begin flowing into the UAE in the first half of this year after a delay of nearly two years because of a dispute over prices, according to importers.
Dana Gas, the first major private sector gas company in the Middle East, also announced it made revenues of Dh1.036 billion in 2007 despite being the first year of commercial operations. Gross profits stood at Dh307 million and net profits at Dh111m. Assets jumped by 59 per cent to Dh10.85bn at the end of 2007.
In a statement posted online by the Abu Dhabi Securities Market, where Dana is the only listed gas firm, the company said all upstream and downstream stages of the multi-billion dollar project had been completed by both sides and that natural gas is now ready to begin flowing into its onshore facilities through a subsea pipeline that was commenced two years ago.
But industry sources expressed doubts that gas could be supplied during that period unless the Sharjah-based Dana acquiesced to Iranian conditions of a much higher price.
“The UAE gas project to process imported gas is now in its final stages of completion. The construction of the company’s facilities in the UAE had been successfully completed in 2005 and await the commencement of the imported gas supplies,” Dana Gas said. “The ultimate supplier of gas has completed installation of all the main components of the required upstream facilities as has been publicly reported. Hook up and pre-commissioning of the upstream facilities is now taking place and supplies are expected to start in the second quarter of 2008.”
The company did not say whether it had reached a new agreement with the Iranians who have demanded a revision of their tentative 2001 agreement to get higher prices for their gas.
Iran justifies its demand based on a sharp rise in oil and gas prices over the past few years and the fact that the 2001 deal involved a “giveaway” price.
In press remarks at the end of 2007, Iranian Oil Minister Gholamhossein Nozari ruled out any gas delivery to Dana unless a new price formula is agreed on.
He said an alternative pipeline is under construction to divert gas destined originally for Dana to the Iranian market if the two sides fail to reach a new agreement involving higher prices. He said the state-owned National Iranian Oil Company (NIOC) had carried out early engineering and design work on the alternative pipeline to send the gas to the port of Assaluyehm where it could be used for gas re-injection.
In 2001, Crescent Petroleum, which co-owns Dana Gas, signed an agreement with NIOC to import gas from the offshore Khuff reservoir associated with the Salman oilfield. But there have been repeated calls from Iranian officials to cancel the deal.
“Unless Crescent has negotiated a new agreement with the Iranians to give them much higher prices, I don’t think there will be any gas coming to the UAE from Iran,” said an industry source close to Iran.
“Iran needs the gas for its domestic consumption, which is growing very fast. They are not badly in need of cash now that oil prices are very high. I can affirm to you that exporting gas is not their priority now unless they are completely satisfied with the prices.”
The contract to send gas to the UAE was signed following long negotiations between NIOC subsidiary Petroiran Development Company, the operator of Salman-Khuff, and Crescent, when oil and gas prices were relatively low.
The gas would be marketed in the UAE by Dana Gas, in which Crescent is the largest shareholder.
Iranian official sources said the deal calls for the supply of 116 billion cubic metres of natural gas to the UAE over 25 years, with the initial sale of 330 million cubic feet a day rising to 600 million in Sharjah’s Hamriyah Free Zone. Gas sales were originally scheduled for January 2006.
Dana Gas has invested billions of dirhams in both onshore and offshore pipelines, gas processing installations, supply networks and other facilities.
More than 300 UAE institutions and businessmen announced the creation of Dana in 2005. The three main founders are Crescent Petroleum, Sharjah Government and the Bank of Sharjah, which eachcontrol 32.7 per cent of the company. Dana’s initial customers include the Federal Electricity and Water Authority, Sharjah Electricity and Water Authority, Dubai Gas and other facilities.
Follow Emirates 24|7 on Google News.