Total, Petronas, NIOC ink LNG deal

Total, Petronas, NIOC ink LNG deal

TEHRAN: French oil giant Total and Malaysian group Petronas
signed a US$2 billion deal on Wednesday with the National Iranian
Oil Company (NIOC) to set up a liquefied natural gas production
(LNG) venture in Iran, an oil ministry official here said.

"The total value of the project is more than $2 billion," said
a spokesman for NIOC, adding that a plant for the venture, Pars
LNG, will be built in Iran's giant South Pars energy zone in the
Gulf.

In Paris, a source close to the deal said NIOC would hold a 50
percent stake in the venture, Total 30 percent and Petronas 20
percent.

A Total spokesman would not comment on the split-up, only
saying: "An agreement between shareholders has been signed and
talks are continuing. It's too soon to calculate the
transaction's amount."

The venture should produce eight million tonnes of LNG per
year and the contract envisages that the plant's production will
go on the market in 2009. The contract is for 25 years and may be
renewed.

"The production of LNG is destined for export although part
will also be used in Iran itself," said the NIOC official, whose
country sits on the second-biggest natural gas reserves in the
world after Russia.

The victory of the conservatives in Iran's Feb. 20
parliamentary elections has had no apparent effect on the
decisions of major oil companies to seek their foothold in Iran.

Negotiations are underway for Phase 11 of the South Pars gas
field and Total appears well placed in this project.

Iran's Oil Minister Bijan Namdar Zanghaneh said recently Iran
preferred to let this phase be handled by a firm which was also
involved in LNG projects involving exporting Iranian gas. -- AFP