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Iran, Malaysia sign $16 billion gas deal

Tehran, Dec 26, IRNA - National Iranian Oil Company (NIOC) and Malaysia's SKS Ventures on Wednesday signed a dlrs six billion gas deal to develop Golshan and Ferdos gas fields and over dlrs 10 billion worth of deals at downstream section to produce liquefied natural gas (LNG).

IRNA Economic News Service reported that a total of dlrs 16 billion worth of deals were signed by Pars Oil and Gas Company and Malaysia's SKS Ventures at both upstream and downstream sectors for development of the two gas fields.

Golshan gas field, 180 km southeastern of Bushehr in the Persian Gulf, is estimated to have 42 to 56 trillion cubic feet of gas reserve and Ferdos gas field is estimated to have a reserve of 9-13 trillion cubic feet.

Ferdos gas field is 190 km southeastern of Bushehr in the Persian Gulf.

Pars Oil and Gas Company (POGC) which currently is involved in South Pars and North Pars gas fields was the Iranian party to the deal.

The deal was finalized one year after the two parties signed a letter of understanding on January 7, 2007.

According to letter of understanding, SKS Ventures of Malaysia undertook to carry out studies on development of the two gas fields.

SKS Ventures is affiliated to Syed Mokhtar Al-Bukhary large conglomerate whose business is distribution of gas in Malaysia.

The deal envisaged buy-back for the upstream sector and that the downstream sector will be ceded to NIOC.

The Malaysian party will make an investment of dlrs five billion to produce 20 million tons of LNG in upstream sector and dlrs 10-11 billion investment in the downstream one.

From the total 20 million ton output of the two gas fields, 10 million tons will be ceded to the Malaysian company and 10 million tons to NIOC.

The Malaysian company's investment will be reimbursed through buy-back scheme in the form of gas output ready for liquefaction.

The reimbursement has been envisaged to take 25 years and that NIOC will take delivery of the two gas fields from the Malaysian party.

NIOC will pay expense of liquefaction of 10 million tons of LNG to the Malaysian partner.

... Payvand News - 12/26/07 ... --

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