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Wed 15 Apr 2009 10:35 PM

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Iran denies new Crescent gas price offer submitted

NIOC exec says talks with Crescent Petroleum, but not about price specifics.

The National Iranian Oil Company (NIOC) denied on Wednesday that Crescent Petroleum has offered a new price for gas imports from Iran.Executive Director of Crescent Petroleum Group Majid Hamid Jafar said on Tuesday that the UAE firm had agreed to increase the price it pays for gas imports from Iran after several rounds of negotiation with Iranian officials, according to PRESS TV.

"There have been no talks with Crescent on a price rise," NIOC head Seyfollah Jashnsaz told the Tehran-based satellite news channel. He added that the NIOC had received ''no letter from Crescent which says it has agreed to raise the price for gas imports. They have not yet offered to hold talks with us on the issue."

The two sides agreed in 2001 to deliver natural gas from Iran's offshore Salman field to Lavan Island in the Persian Gulf to meet rising energy demand in the UAE. But prices have risen since then and talks have stalled over how much Crescent should pay for the gas.

The original agreement envisaged a 25-year contract starting in 2005. However, Iran's state auditors then determined the country could lose as much as $21 billion over the 25-year agreement if gas prices did not meet market conditions.

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

Jafar said Crescent had proposed a 'much higher' price than the previous offer, adding that the firm was waiting for a response from the Iranian Oil Ministry.

However, the NOIC's Jashnsaz stressed that there were other issues in addition to the price of gas, such as setting a new delivery point, which would have to be agreed on before the signing of any deal.

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