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The long-running dispute between the National Iranian Oil Company (NIOC) and Crescent Petroleum over importing Iranian gas to the UAE has taken a new twist after the Abu Dhabi sovereign wealth fund, Mubadala, made a bid to take over the agreement.
The Iranian Mehr News Agency reported that NIOC and Mubadala have reached a preliminary agreement, adding Iran will start to deliver up to 10 million cubic meters of gas per day to the Emirati company.
This volume of gas will be transferred for a period of 25 years through a subsea pipeline.
While Iran and Crescent Petroluem have not come to terms on the gas transfer conditions, three other Emirati companies have announced readiness to buy the country’s Salman field natural gas.
Crescent has recently decided to seek international arbitration for what it called the failure of Iran’s state oil firm to fulfill the gas export contract.
This is while Iranian officials have repeatedly stated that the NIOC-Crescent deal will be enforceable only if it serves Iran’s national interests.
Crescent National Gas Corp. signed a deal with the NIOC in 2001 to import natural gas from Iran’s Salman field through a pipeline that was supposed to be built jointly by NIOC and Crescent.
Based on the deal, NIOC was supposed to export 17 million cubic meters (600 million cubic feet) of gas daily to the UAE for 25 years starting in 2005.
As oil rallied in following years, some officials and politicians in Iran called for a revision to the price formula. They have blamed the price dispute for the delay.
Crescent says the two sides provisionally agreed on a revised price in September last year, but that it has heard nothing from NIOC on the price since then.
Both Mubadala and Crescent Petroleum declined to comment.
