Shell in billion dollar Iranian gas contract

Anglo-Dutch energy concern Shell and the Spanish oil company Repsol have won orders believed to be valued at $4.3bn in a project to drill for gas in Iran, the Financieele Dagblad reports today.

Shell’s access to the biggest gas field in the world – which has potential reserves of 16,800 billion cubic metres – will, however, be limited to contracts to build off-shore drilling platforms, gas production and the construction of pipelines, the paper says.
This construction work is scheduled to be completed in 2011. The Iranian state oil company Nioc will retain full control over the gas field.
Shell and Repsol are however expected to get a 25% stake each in a LNG plant which will be built to turn the gas into liquid for transport by tanker.
According to the FD, Shell has confirmed that a deal has been signed with Iran but added that a definitive decision on investment is not expected until next year.
Western investment in Iran is sensitive in light of the country’s nuclear programme. The US has already imposed an embargo and the UN is also considering sanctions. A Shell spokesman told the FD: ‘You can be assured that we have discussed this project with all stakeholders, including the American government.’

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