October 12, 2009 / 10:32 AM / 10 years ago

UPDATE 1-Iran sees possible Total deal worth $7.5-8 bln

(Adds quotes, detail, background)

TEHRAN, Oct 12 (Reuters) - A senior Iranian energy official said on Monday the value of a possible new liquefied natural gas development deal with France’s Total (TOTF.PA) had fallen to $7.5-8 billion, state broadcaster IRIB reported.

Reza Kasaiezadeh, managing director of the National Iranian Gas Export Company, said this would represent a reduction compared with an earlier contract concerning phase 11 of the South Pars gas field in the Gulf which he valued at $12 billion.

Total declined to be drawn on the details of any possible deals in Iran. “We have no comment to make. However, Iran remains a country of interest to us in the long term,” a Total spokeswoman said.

“If it is finalised, the value of the new contract with Total will be between $7.5 to 8 billion considering the fall in the oil price,” Kasaiezadeh told IRIB.

“If a contract is signed with this company we would be witnessing some changes in the value of the contract in the midstream section, which means LNG production,” he said.

In June, the official Iranian news agency IRNA said Tehran had signed a $4.7 billion contract with China National Petroleum Corporation (CNPC) to help develop phase 11 of South Pars, replacing Total which it had accused of delays.

Total had a memorandum of understanding (MOU) with the state National Iranian Oil Company (NIOC) to develop Phase 11 but the project was overshadowed by haggling over contract terms. U.N. and U.S. sanctions have also deterred Western firms in Iran.

But the semi-official Mehr News Agency on Saturday said NIOC and Total had resumed talks about the French energy firm’s participation in phase 11 after a gap of several months [ID:nDAH148173].

“Total has announced its readiness to develop both the upstream and midstream sectors of South Pars phase 11, either with the Chinese company or without,” Kasaiezadeh said.

“They started talks with the Chinese side and if Total is not serious again this time, the development of the upstream section of phase 11 will be continued by the Chinese company and a new decision must be made for the midstream section,” he said.

Iran has the world’s second largest gas reserves, almost 16 percent of the world’s total, but currently has no major net exports partly because U.S. and U.N. sanctions have deterred investment by Western firms with expertise and technology.

The South Pars reservoir is shared by Iran and Qatar. The Iranian part is divided into 24 phases. (Reporting by Reza Derakhshi; editing by William Hardy)

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