Gazprom Signs MoU for Iran LNG
Russian giant Gazprom has signed a memorandum of understanding with Iran to evaluate and potentially complete the country’s less than half-finished LNG plant, Gazprom announced Dec.13. It has also agreed to run its sliderule over three upstream gas projects.
Iran half-built the Iran LNG export plant with German partner Linde at a cost of $2.5bn. However, the 40% completed project was suspended in mid-2000s due to nuclear sanctions against Tehran. The design capacity of the liquefaction plant, if completed, is 10.4mn metric tons/yr.
Iran’s oil minister Bijan Namdar Zangeneh said that Gazprom will study the project over the next six months and offer its proposal to complete plant: “Some $4bn is needed for completion of project.”
The MoU was signed in Tehran December 13 by CEO Gazprom Alexey Miller, his National Iranian Oil Company counterpart Ali Kardor, and the head of the Iran Oil Pension Investment Company, Nosrat Rahimi. Zanganeh said that the repayments of expenditures would be carried out from LNG export revenues.
Zanganeh said that Gazprom is studying the Kish gasfield (1.57 trillion m3 reserves), North Pars (1.67 trillion m3) as well as Farzad A&B (with between 0.56 and 1 trillion m3 reserves).
Miller also said that his company would submit the study results of the fields cited by March 2018. Gazprom described the MoU as a kind of 'roadmap' on how upstream and LNG projects might develop.
Gazprom has signed several MoUs with Iran in various fields, from petrochemicals to pipeline construction and in the oil and gas upstream, but has yet to sign a contract on them. The Russian firm has a bit of a reputation for not following through with possible investments in non-OECD markets, particularly Africa, perhaps because the cost of developing its own Russian reserves is usually much cheaper. In Iran, it might however have access to similarly cheap feed gas. Both countries also have common political goals, and have militarily supported the Syrian government of Bashar al Assad.
Iran two months ago formed a joint venture, IFLNG, with Norwegian project company Hemla aimed at developing a $600mn, 0.5mn mt/yr floating LNG venture using South Pars gas.