• Natural Gas News

    Iran Cancels Deal with Norwegian FLNG Developer

Summary

Iran has canceled a contract signed with Norwegian Hemla last year to jointly develop an LNG export project, oil minister Bijan Zanganeh said during a press conference Feb.4 according to the ministry’s official website.

by: Dalga Khatinoglu

Posted in:

Natural Gas & LNG News, Europe, Middle East, Corporate, Exploration & Production, Infrastructure, Liquefied Natural Gas (LNG), News By Country, Iran, Norway

Iran Cancels Deal with Norwegian FLNG Developer

Iran has canceled a contract signed with Norwegian firm Hemla last year to jointly develop an LNG export project, oil minister Bijan Zanganeh said during a press conference Feb.4 according to the ministry’s official website.

Responding a question about rising criticism about the cheap feed gas price included in the contract, Zanganeh said “the deal has been already canceled”. Norwegian Hemla hasn’t published anything about cancelling the deal yet.

National Iranian Oil Company (NIOC) and Hemla formed a joint floating liquefaction (FLNG) venture October 2017 to export 0.5mn mt/yr LNG for 20 years. They had planned to lease Exmar’s Caribbean FLNG vessel by this summer which would then have received 2.3mn m³/d of feed gas from the seventh South Pars gas field processing plant.

After sealing the deal, criticism among hardliners mounted, blaming the government for undercharging the gas sales price at $100/'000 m3 (based on an oil price of $50/barrel), which equates to $2.78/mn Btu.

Initially the sides were in talks over a $600mn contract that included the gathering of gas that would otherwise be flare in the Kharg region, rather than refined gas from South Pars.