Iran, Kuwait Sign $7 Billion Gas Deal

Agence France Presse
Publication Date: 
Wed, 2005-03-16 03:00

ISFAHAN, Iran, 16 March 2005 — Kuwait and Iran signed a $7-billion, 25-year deal yesterday under which Tehran will supply some 10 million cubic meters (300 million cubic feet) of natural gas daily to the emirate, officials said.

Delivery is scheduled to begin in 2007, Iranian Oil Minister Bijan Namdar Zanghaneh said after signing a memorandum of understanding with Kuwaiti Energy Minister Sheikh Ahmad Fahd Al-Sabah in Isfahan on the eve of an OPEC meeting in this Iranian city. Zanghaneh said he expected a final contract to be signed within six months.

OPEC member Iran has the second largest gas reserves in the world after Russia, with 26,000 billion cubic meters, accounting for 15 percent of the world’s reserves.

Kuwait is rich in oil but not natural gas. The emirate has already signed an agreement with Qatar to import gas to feed its power plants.

Iran also began talks yesterday with Oman to supply it with 30 million cubic meters of gas per day as of 2008, rising to 70 million cubic meters by 2012, Zanghaneh said. He said he expected a deal to be wrapped up within six months.

Meanwhile, Iran announced that it intends to increase its gas production and exports and plans to gradually substitute oil for gas, as it aims to raise production from 110 billion cubic meters in 2000 to 292 billion in 2010. Gas already represents one-third of Iran’s domestic energy consumption, but it has had a hard time finding foreign markets. It currently sells to its neighbors in the Gulf region, but hopes to eventually supply liquefied natural gas to Asia and Europe.

In May 2004, Tehran signed a contract to supply 15 million cubic meters of gas per day to the United Arab Emirates, and in October it inked a preliminary $100-billion deal with China for 10 million tons of liquefied natural gas over 25 years.

And India’s government recently authorized its oil minister to begin talks with Iran to buy gas that could transit a gas pipeline running through Pakistan.

Main category: 
Old Categories: