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Majlis Calls on Govt. to Annul Gas Deal with Crescent

Service : Economy
TEHRAN, April 10 (ICANA) – The Iranian parliament on Sunday asked the government to annul a long-debated gas contract between Iran and the UAE-based Crescent Petroleum Company.
Sunday, April 10, 2011 8:54:59 PM
Majlis Calls on Govt. to Annul Gas Deal with Crescent

Rapporteur of the parliament's 'Article 90' Commission Hossein Eslami told FNA on Sunday that the commission has asked for the annulment of the contract after it long probes into the agreement.

"At the end of studies, the Article 90 commission concluded that the contract is against the interests of the Islamic Republic of Iran in nature," Eslami stated, adding that the commission has already informed the Iranian Oil Ministry of the issue and asked the ministry to take proper measures to revoke the contract.

"The percentages as well as the interests of the crescent contract were in no way in the interest of Iran," the lawmaker added.

The National Iranian Oil Company (NIOC) and the UAE's Crescent Company signed a deal in 2001 to transport natural gas through a 90-mile pipeline from the Salman field to the Lavan Island (both within the Iranian territories) in the Persian Gulf.

However, Iran increased its initially proposed price, citing a sharp rise in international gas prices since the time the contract was agreed upon between the two countries.

The original agreement envisaged a contract of 25 years starting in 2005. Iran's state auditors said Iran could lose as much as $21 billion over the 25-year agreement if gas prices do not meet market conditions.

Based on the agreement, Iran was to export 195 million cubic feet of gas to the Persian Gulf state in 2005-2006 followed by exports of 230 million cubic feet, 300 million cubic feet and 350 million cubic feet in the following three years.

Oman and Kuwait are among the Persian Gulf Arab states seeking natural gas supplies from Iran, which holds the second-largest natural gas reserves in the world after Russia.

The UAE needs the gas to meet its rapidly rising domestic demand from industry and power plants.

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