950828

Dubai, Total discuss

Iran gas imports

NICOSIA: The UAE emirate of Dubai and French oil firm Total SA have begun official negotiations on the sale of Iranian gas to Dubai, the Middle East Economic Survey (MEES) newsletter reported on Monday.

Total and the National Iranian Oil Company (NIOC) agreed in July that Total will develop Iran's Sirri E and A offshore oil and gas fields, Tehran's largest oil deal with a foreign firm since its 1979 revolution.

The start of the gas supply talks is seen by industry watchers as another step foreward for the $600 million Sirri project which has come under pressure from the US government which is seeking to deny Iran access to foreign finance.

US President Bill Clinton, in the run up to sweeping US sanctions against Iran, quashed a proposed deal on Sirri between NIOC and American Dupont Co (DD.N) unit Conoco last March.

"The US made diplomatic representations to the Ruler of Dubai in an effort to persuade the Dubai government not to purchase Iranian gas made available as a result of the Sirri oilfield development venture," Cyprus-based MEES reported.

Unilateral US sanctions, which has stopped the annual $4 billion oil trade between American oil firms and Tehran, were imposed on Iran because of its alleged sponsorship of international terrorism and its desire for nuclear weapons.

"However the initiation of formal negotiations between the Dubai government and Total with regard to the purchase of this gas would suggest that the US representations have fallen on deaf ears in Dubai," MEES said.

All of the 100 million cubic feet per day (cfd) of gas produced in the Sirri region has been sold to Total for 25 years, according to Iranian oil minister Gholamreza Aghazadeh.

MEES said Sirri gas is projected to be used for a gas injection scheme at Dubai's offshore oilfields which are located just across the offshore demarcation line from the Sirri fields in Iranian waters and in which Total has an equity stake.

Total is proposing a price of $1.25 per British Thermal Unit (BTU) for Sirri gas exports to Dubai, the newsletter said.

Dubai's gas demand is expected to double within five year to 800 million cfd, which has led the emirate's government to hold talks with neighbouring Abu Dhabi, Qatar and Oman on imports of gas.-Reuter