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Thu 19 Jun 2008 05:22 PM

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Crescent to import Iran gas in 3 months

UAE's Crescent Petroleum to start importing gas from Iran's offshore Salman Field in Sept.

UAE's Crescent Petroleum expects to start importing gas from Iran's offshore Salman Field in three months, its chairman said on Thursday.

"It's imminent. It shouldn't be more than three months," Hamid Jaafar, also executive director of Crescent's parent company, Dana Gas, told newswire Reuters.

"We are discussing additional quantities. We have an option for it but it needs agreement," he said.

The initial agreement between Iran and privately owned Crescent, was for the supply of 600 million cubic feet per day. Dana Gas will process and transport the gas to utilities and industrial users in the UAE.

Iran and Crescent have been locked in long negotiations about the price of gas exports from the Salman field to the UAE since 2006.

Iran said in April that it would use the gas it planned to sell to Crescent Petroleum domestically if a long-running dispute with the UAE firm over price was not resolved.

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

The UAE needs gas from the $1 billion project to meet rising domestic demand from industry and power plants, but the deal became controversial in Iran after some politicians said the export price should be higher.

Jaafar said his company will not be able to take part in Iraqi oil projects as it had been blacklisted by the federal government because it was involved in projects in the semi-autonomous Kurdish region.

Iraq's central government has criticised deals that international energy firms have struck with the semi-autonomous Kurdish regional government (KRG), calling them illegal.

The KRG, which has clashed with Baghdad over draft oil legislation, has countered that the deals are legal and comply with Iraq's constitution.

Dana won a service contract from the Kurdish regional authority in April 2007 for the rapid installation of processing and transmission facilities at the Khor Mor field to begin supplying gas for power generation by January 2008.

The gas is to supply two power plants with a capacity to generate 1,250 MW of power near the cities of Arbil and Sulaimaniya.

Jaafar said that he hoped to start supplying gas to the Arbil plant by the end of July and to Sulaimaniya in 2009. (Reuters)

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