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Gulf-Times (Qatar): Tehran disagrees with Total $10bn Pars cost estimate

Published: Tuesday, 10 April, 2007, 07:53 AM Doha Time
 
DOHA: Iran doesn’t agree with Total’s $10bn cost estimate for the Pars liquefied natural gas development, and is still in negotiations with the company over the future of the project, Iran’s Energy Minister said yesterday.

“The proposal by Total concerning the costs … wasn’t in line with our expectations. We have given our views and they are reconsidering their position,” Kazem Vaziri-Hamaneh said on the sidelines of the Gas Exporting Countries Forum meeting in Doha.

Total chief executive Christophe de Margerie said last week the planned Pars gas liquefaction plant, which would be Iran’s first LNG export facility, might not go ahead owing to rocketing costs that he estimated at $10bn.

Hamaneh said Iran had come to an understanding and an agreement with Royal Dutch Shell and Repsol over $10bn agreement with the Iranian government to develop two additional areas of the huge South Pars natural gas field. He didn’t elaborate on the terms of the agreement.

The US government is reported to have warned Shell and Repsol they too may face sanctions if they do business in Iran.

Hamaneh added that Iran has already begun development of its own LNG facilities, and has also signed memoranda of understanding with China and Malaysia over separate developments of the North Pars field.

Iran has the world’s second largest reserves of gas, after Russia, but its industry is struggling to meet domestic demand and export commitments due to a long period of under-investment. Since 2005, Iran has been a net importer of gas. – Dow Jones Newswires

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