Executive Director of the Crescent Petroleum Majid Hamid Jafar said, We are now waiting for the Iranian Oil Ministry’s decision in this regard.
The National Iranian Oil Company (NIOC) and Crescent Petroleum signed a agreement in 2001 to supply natural gas through a 90-mile pipeline from the Salman field to Lavan Island in the Persian Gulf.
However, Iran raised its initially proposed price, citing a sharp rise in international gas prices since the time the contract was agreed upon between the two countries.
The original deal envisaged a contract of 25 years starting in 2005. Iran’s state auditors said Iran could lose as much as $21 billion over the 25-year contract if gas prices do not meet market conditions.
Based on the agreement, Iran was to supply 195 million cubic feet of gas to the Persian Gulf state in 2005-2006 followed by exports of 230 million cubic feet, 300 million cubic feet and 350 million cubic feet in the following three years.
Jafar said the cancellation of the agreement was also an option, but added that this would ‘seriously question the two sides’ credibility’.
Iran has stressed gas supplies to the UAE would only commence after a new price is set in the contract.
