Iran is in talks with to others to buy gas it planned to sell to Crescent Petroleum if a dispute is not resolved.
Iran is talking to others who could buy gas it planned to sell to Crescent Petroleum if a dispute with the UAE firm over price is not resolved, Iran's oil minister said in remarks published on Wednesday.
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.
"To find a replacement for the Emirates for ... the Crescent deal, we are negotiating with some foreigners who are ready to buy our gas at the market price," Donya-ye Eqtesad daily quoted Iranian Oil Minister Kazem Vaziri-Hamaneh as saying.
Iran said in May it had issued an "ultimatum" to the UAE private energy company Crescent about resolving the differences or losing the gas. The company later said the deal "remained firm and internationally binding."
Vaziri-Hamaneh added: "We have also considered using the gas for domestic purposes."
Iran has no pipeline from the offshore Salman field back to Iran and therefore limited options for domestic use.
It is unclear what alternative use Iran could find for the gas as there are no alternative pipelines for export from the field. On the UAE's side, the offshore pipeline and gas receiving facilities have long been complete.
Technical problems and a shortage of labour have held up the Iranian side of the project. The wrangle over the gas price was unlikely to end until the supply facilities were ready, industry sources have said.
Crescent, based in the northern emirate of Sharjah, had expected first deliveries of the gas in mid-2006. The initial agreement was for the supply of 600 million cubic feet per day.
Crescent's affiliate Dana Gas will process and transport the gas to utilities and industrial users in the UAE.
The delay has caused problems for Sharjah, which said last week it had started talks with BP and Dolphin Energy due to the delay in deal with Iran.For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.