Shell pulls out of Iran gas agreement
Reuters – 11 May, 2008
www.gulfinthemedia.com/index.php?id=401232&news_type=Economy&lang=en
Oil major Royal Dutch Shell has pulled out of a planned gas project in Iran,
after coming under pressure not to participate from US lawmakers who were
concerned about Iran’s nuclear programme.
A spokeswoman said yesterday that the world’s second-largest non
government-controlled oil company by market capitalisation was pulling out
of Phase 13 of the giant South Pars gas field but may yet join later stages
of the field’s development.
Shell, Spain’s Repsol and the National Iranian Oil Company (NIOC) signed a
Memorandum of Understanding in January 2002 to develop Phase 13 in a project
to be known as Persian LNG.
At the time, Shell said deliveries of liquefied natural gas – gas cooled to
liquid under pressure for transportation in special tankers – could begin in
2007.
However, United Nations sanctions on Iran related to its nuclear programme,
which it claims is for power generation but which the US and European states
believe is aimed at developing weapons, and criticisms of the deal from US
politicians and investors, slowed progress.
Meanwhile Iran grew impatient and threatened Shell with eviction from the
project if it did not commit formally. The spokeswoman for the Anglo-Dutch
company said:
“We have agreed the principal of substitution of alternative later phases
for the PLNG project so that INOC can proceed with the immediate development
of Phase 13.”
She would not give a reason for the decision. Repsol was not available for
comment.
Iran will now need to find new partners for the project. Media reports have
suggested Russia’s Gazprom, Indian Oil Corp and Chinese companies could
join, as they are expected to be less susceptible to U.S. political
pressure, but the companies have limited experience of LNG.
