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Iran hopes to seal $4b in new LNG deals soon

DUBAI - Iran is hoping to clinch two new liquefied natural gas (LNG) deals worth $4 billion with foreign investors by the end of next month, a senior Iranian energy official said yesterday.

The contracts - Persian LNG which partners Royal Dutch/Shell and Spain's Repsol YPF, the other involving Britain's BG Group - would follow closely on the heels of Wednesday's $2 billion LNG deal with France's Total and Malaysia's Petronas.

"We are very hopeful to finish these contracts before our new year (March 20)," the official told Reuters by telephone from Tehran. "We have been under heavy pressure for some time to finish these deals."

Iran sits atop the world's second biggest gas reserves after Russia, but has lagged behind its neighbour Qatar in developing its resources.

The official said the Shell/Repsol scheme, valued at $3 to $4 billion, could include the award of phase 13 of the giant South Pars gas field. The BG package is estimated at $1 billion.

A Shell spokesman confirmed talks on a potential LNG deal with Repsol and the National Iranian Oil Co were continuing.

"We are not at the stage yet of taking a decision on whether to commit to the project," he said of the scheme in which the multinationals would each take a 25 per cent share.

"It is one of a number of such projects competing to be the first from Iran."

The Anglo-Dutch oil major has already committed to invest in the nation's oil sector via the offshore Soroush-Nowrouz fields.

BG has already signed a memorandum of understanding on an LNG plant, with a potential site at Bandar Tombak on Iran's south coast. Chief Executive Frank Chapman said in March he hoped to finalise a deal this year.

A spokesman said yesterday "we are still negotiating."

Iran reopened its energy sector to foreign investment in 1995 with Total and Petronas in the vanguard.

Industrialised nations in Europe, Asia and the United States are looking to LNG as a way of meeting rising natural gas demand.