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