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Total to enter LNG deal with Iran

Tehran, April 22, IRNA - French Total company will go along with Iran in its LNG project in defiance of sanctions or tough actions.

"Total is a private company and we respect regulations of the countries with which we work... Our prime duty is providing energy to the country (Iran). What politicians decide is not our concern. We observe the rules, regulations and laws (of the host country)," Total Vice President in Middle East, Iran, for exploration and production Andre Goffart told IRNA.

As for the National Iranian Oil Company's (NIOC) announcement setting late June as the deadline for Total's decision about South Pars, Goffart said that he did not expect the project will be technically ready for launching by June and his company needs to discuss it with the NIOC and set a timetable.

He said that the LNG project is a large and complex project and the realities of the project should be taken into account since the first step for launching any project is an assessment of its nature and due agreements.

Asked whether the problem with Total and the NIOC on the project is the cost, he said the problem is not just the cost, rather there are many other issues at work, including revenues and terms of the contract.

"Cost is just one of the issues. There are many other issues. We have many contracts, some of them with NIOC," he said.

As for the LNG cost, he said, significant amount of equipment needed for the project have to be imported because LNG is new to Iran.

"So we cannot ignore what the market is outside."

To a question on how much more time will be needed for talks with Iran's NIOC on the LNG project given that the two sides had been in talks on the issue for a long time, he said it is difficult to answer the question because there are many parameters which are beyond control, including the cost.

"Cost is something we have to face and after having seen this increase in cost, we have had to review all the contracts; so we do some of the work, both for the LNG contract and the contracts with the NIOC."

He said that such projects need determination and long-term vision.

On the NIOC demand on Total to propose a small package, he said "We don't believe this is a solution. We need to bring financial frames, management frames from international companies. And today I cannot think of small pieces using small companies to realize the big project. I think we can manage it soon."

Asked whether Total eyes participation in projects for the development of other phases of South Pars, Goffart said his company wants to have a share in Pars LNG.

"We have to invest in the project. Main focus is Pars LNG and SP 11."

Questioned about Total's next move if it failed to reach any agreement with the NIOC late June, he said, "We are optimistic and I think we will reach an agreement with the NIOC... We are industrialists. We want to invest in the world. We need to do it under good terms. And if all parties are reasonable we should find solutions. I think Iran is important in the energy market and the market needs gas from Iran and we are here for a long term. So I do not think why we should not be successful and overcome the difficulties."

Asked about problems, if any, between Total and the Iranian party, he said there are some technical challenges that need to be overcome.

"The project is a good experience for both Total and the NIOC." He said Total needs to launch in-depth studies on the project before stepping in the scene and deciding on the project.

... Payvand News - 04/23/08 ... --

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