TEHRAN (AFX) - Iran signed a preliminary agreement with Repsol YPF SA and Royal Dutch Shell to produce liquefied natural gas from its South Pars gas field, the student
news agency ISNA reported Sunday.
'This contract is the biggest project in terms of investment and the volume of gas converted to LNG,' said the head of National Iranian Oil Company, Gholam Hossein Nozari, quoted by ISNA.
But he added the final decision on the investment, which the agency valued at 10 bln usd, would be made by the end of 2007.
'The upstream work of phases 13 and 14 (of South Pars field) will be carried out on buyback terms,' Nozari said.
He said Shell and Repsol would each have a 25-pct share while Iran maintained a 50 pct stake in the project, aimed at producing an annual 16 mln tonnes of LNG.
Iran's buyback system skirts around its constitution, which prohibits foreign companies from taking an equity stake in its oil and gas sector. Instead, it enables foreign companies to develop a project for a set time, after which they are paid by the government in oil or gas revenues at market prices.
Iran sits on the world's second largest reserves of natural gas after Russia but faces investment problems in developing the fields. newsdesk@afxnews.com afp/vs COPYRIGHT Copyright AFX News Limited 2006. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
'This contract is the biggest project in terms of investment and the volume of gas converted to LNG,' said the head of National Iranian Oil Company, Gholam Hossein Nozari, quoted by ISNA.
But he added the final decision on the investment, which the agency valued at 10 bln usd, would be made by the end of 2007.
'The upstream work of phases 13 and 14 (of South Pars field) will be carried out on buyback terms,' Nozari said.
He said Shell and Repsol would each have a 25-pct share while Iran maintained a 50 pct stake in the project, aimed at producing an annual 16 mln tonnes of LNG.
Iran's buyback system skirts around its constitution, which prohibits foreign companies from taking an equity stake in its oil and gas sector. Instead, it enables foreign companies to develop a project for a set time, after which they are paid by the government in oil or gas revenues at market prices.
Iran sits on the world's second largest reserves of natural gas after Russia but faces investment problems in developing the fields. newsdesk@afxnews.com afp/vs COPYRIGHT Copyright AFX News Limited 2006. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited