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Sun 26 Feb 2012 04:11 PM

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UAE, Qatar, Oman to buy $2bn Iranian electricity – report

Iranian media said the deal will come on stream over the coming years

UAE, Qatar, Oman to buy $2bn Iranian electricity – report
Stricter sanctions have made it difficult for Iran to trade

Iran is likely to export up to $2bn worth of electricity to the UAE, Qatar and Oman once a gas field in the Arabian Gulf is operational, a senior Iranian energy minister claimed.

The Iran Offshore Oil Company (IOOC) recently struck a $3.8bn deal with Iran’s Power Projects Management Company (MAPNA) to develop a gas field in the Arabian Gulf and Iranian deputy energy minister Mohammad Behzad said some of the output would be exported to the Gulf states.

“The field will produce 3000 megawatts of electricity… which a little of it will be consumed at home and the rest will be exported to neighboring countries, particularly (the United Arab) Emirates, Oman and Qatar,” Behzad told the Fars news agency.

Behzad estimated up to $2bn worth of electricity could end up in the UAE, Qatar and Oman, the Tehran Times reported.

MAPNA managing director Abbas Aliabadi told the Shana news agency the project aims to produce one billion cubic feet of gas and 3,000 megawatts per day of power in the first phase.

Aliabadi added “a percentage” of the power will be exported to Gulf states. Iran currently exports electricity to Turkey, Armenia, Turkmenistan, Azerbaijan, Pakistan, Afghanistan and Iraq.

The world's fifth-largest oil exporter, Iran is currently struggling to retain its position with consumers as stricter sanctions and an embargo make it impossible to trade, sapping an important lifeline for an increasingly isolated country.

Iran's fuel oil shipments to East Asia in March are expected at 300,000-350,000 tonnes of straight-run 280-centistoke (cst), well below last year's monthly average of 550,000-600,0000, shipping reports show and Singapore-based fuel oil traders said.

Iranian exports made up nearly 8 percent of the 7-million tonne monthly inflow into East Asia, the world's biggest market for the product, last year. A further decline may boost prices above the three-year highs they hovered around in the past four months and keep them at elevated levels.

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