Iran swaps total with new partner

Iran to replace Total with "another partner", as it seeks to develop its giant South Pars gas project.

A man works on phases 2-3 of the South Pars gas field, owned jointly by Iran and Qatar, in Assaluyeh on Iran's Persian Gulf coast May 27, 2006. Picture taken on May 27, 2006. REUTERS/Morteza Nikoubazl
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Iran says it will replace the French energy company, Total, with a new partner in the current phase of the country's enormous South Pars gas project. A top Iranian official said Total would have no "active role" in developing the giant offshore gasfield, adding the company had held up a project key to Iran's development plans. "This company has procrastinated in commissioning this national project," Seifollah Jashnsaz, the director of the state-owned National Iranian Oil Company (NIOC), said on Wednesday, according to the official IRNA news agency. "On the basis of co-ordination with Total officials, another partner will join Phase 11 of the South Pars gasfield and Total's leadership share will be transferred." A Total spokesman said the company was still in talks with Iranian authorities about its possible participation in South Pars. "We are still in discussion. No decision has been made yet." Last month, Mr Jashnsaz said Total was set to sign a deal on South Pars development with Iran's government by March 20, but Total said an agreement was not imminent. In July, Christophe de Margerie, the chief executive at Total, said investment in Iran was politically too risky. Total was to have led the development of facilities for liquefying gas pumped from South Pars, which contains an estimated 500 trillion cubic feet of reserves, representing 8 per cent of global gas reserves. Iran has long sought access to the sophisticated technology required to build and operate production facilities for liquefied natural gas (LNG), as it would enable the country to develop lucrative export markets for it, especially in the Asia-Pacific region. But only a handful of energy companies worldwide, all based in Europe and the US, have the technical expertise for such a venture. The US and its chief European allies have pressed companies to curtail investment in Iran, especially in areas involving advanced technology, in a campaign aimed at isolating it over its nuclear aspirations. The UN applied sanctions against Iran after the country refused to dismantle its controversial nuclear enrichment programme. The US government and others believe Iran is covertly developing nuclear weapons. Iran's government says it is seeking only to develop civilian nuclear power. "Total has declared in talks with NIOC that, because of sanctions against Iran, it cannot have an active role in the [South Pars] project, and so a partner has been chosen to transfer the company's stake to," Mr Jashnsaz said on Wednesday. He did not name the new partner. The Turkish state petroleum company, Türkiye Petrolleri (TPAO), might invest US$6 billion (Dh22.03bn) in developing sections of South Pars, its chief executive, Mehmet Uysal, said today. But TPAO is not known to have access to gas liquefaction technology, so it would probably be involved in phases related to supplying Iran's domestic gas market, or exports by pipeline. Among other things, Iran hopes to supply gas to the planned Nabucco pipeline project, which would bring gas from Central Asia and the Middle East to Europe through Turkey, helping Europe lessen its dependence on Russian gas. It is not yet clear whether the US, under the new administration of Barack Obama, would oppose such a plan. tcarlisle@thenational.ae