TEHRAN (FNA)- Iran expects to finalize by March next year a $7 billion deal with a European firm on developing the offshore Lavan natural gas field in the Persian Gulf, an Iranian official said in comments published on Monday.
Head of the Iranian Offshore Oil Company (IOOC) Mahmoud Zirakchianzadeh did not name the European company.
The Lavan gas field, which was discovered in 2003, has in-place reserves of around 10 trillion cubic feet.
‘The $7 billion agreement on the development of this field will be finalized by the end of the year,’ Zirakchianzadeh was quoted as saying by the Kayhan newspaper.
He was referring to the Iranian year ending on March 21.
In February, Polish gas monopoly PGNiG said it had signed a preliminary deal with the IOOC to cooperate on managing already-discovered gas reserves.
Poland, which depends on Russia for 48 percent of its gas and nearly 70 percent of its gas imports, has made diversifying supply a priority. The deal with Iran could pave the way for such a diversification.
Zirakchianzadeh said turning the gas into liquefied natural gas (LNG) for export purposes was the main goal of the Lavan gas field development. LNG is gas condensed into liquid at sub-zero temperatures.
Iran, which sits on the world’s second largest reserves of both oil and gas, is facing US sanctions over its civilian nuclear program.
Iranian officials have dismissed US sanctions as inefficient, saying that they are finding Asian partners instead. Several Chinese and other Asian firms are negotiating or signing up to oil and gas deals.
Following US pressures on companies to stop business with Tehran, many western companies decided to do a balancing act. They tried to maintain their presence in Iran, which is rich in oil and gas, but not getting into big deals that could endanger their interests in the US.
Yet, after oil giants in the West witnessed that their absence in big deals has provided Chinese, Indian and Russian companies with excellent opportunities to signing up to an increasing number of energy projects and earn billions of dollars, many western firms are slowly losing reluctance to invest or expand work in Iran.
Some European countries have also recently voiced interest in investment in Iran’s energy sector after a gas deal was signed between Iran and Switzerland regardless of US sanctions.
The National Iranian Gas Export Company and Switzerland’s Elektrizitaetsgesellschaft Laufenburg signed a 25-year deal in March for the delivery of 5.5 billion cubic meters of gas per year.
The biggest recent deal, worth â‚¬100m ($147m, Â£80m), was signed by Steiner Prematechnik Gastec, the German engineering company, this month to build equipment for three gas conversion plants in Iran. This is at a time when France’s Total, Royal/Dutch Shell and Norway’s Statoil have put on hold their shares in multi-billion dollar contracts.