Iran, Malaysia sign $14bn Gas Deals

Tehran, Iran | December 03, 2008 by D-8 Secretariat

Iran signed gas deals worth $14 billion with Malaysia

Iran signed gas deals worth $14 billion with Malaysia, state television reported on Tuesday, the latest Asian investment in the country.

The deals involved a project to produce liquefied natural gas (LNG) and the development of two gas fields, the television said, without making clear if they were all new or were related to contracts sealed in late 2007.

The ISNA news agency said they were signed on Monday with Malaysia’s SKS group, which in December last year struck a multi-billion-dollar gas development contract with Iran, which boasts the world’s second largest gas reserves after Russia.

The National Iranian Oil Company (NIOC) and SKS, which is linked to tycoon Syed Mokhtar Al-Bukhary, reached a preliminary $16 billion deal in January 2007 to develop the southern Golshan and Ferdows gas fields and build plants to produce LNG.

But a spokeswoman for the National Iranian Gas Exporting Company (NIGEC) said those contracts concerned upstream development of the fields, while the ones signed on Monday evening concerned “midstream” development and an LNG plant.

“Three documents pertaining to the Golshan and Ferdows fields’ midstream development were signed last night,” she told Reuters, without giving further detail.

Malaysian state oil firm Petroliam Nasional (Petronas) had said in July it was interested in Iran but said it was assessing its involvement in the Pars LNG project because of rising costs. It was not clear if TV was referring to this deal.

Pars LNG is one of several projects that Iran has been planning but which has made limited progress

Iran’s Oil Minister Gholamhossein Nozari said exports of crude and 120,000 barrels of gas condensates were part of the agreements signed on Monday.

“The development of Golshan and Ferdows gas fields will be based on a buy-back contract, and (it was) also agreed for Malaysia to invest in and build an LNG plant,” the ISNA news agency quoted him as saying.

D-8’s Economist, Esen Gonen, cherished this as an inspiring news for other memberstates of the D-8, to further increasing the intra-trade and energy sectors among the member. She said that as a grouping, D-8 possess a huge potential and many areas of cooperation are not fully explored and optimized yet. She said that D-8 has prepared the Roadmap of 2018 for development of the region and has been agreed by memberstates during the D-8’s Kuala Lumpur 6th Summit earlier this year.

News Contributor: REUTERS

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