Iran agrees Kuwait gas export deal

10 October 2008
Iran has sealed a long-awaited deal to initially export gas to Kuwait via a trunk pipeline, with the first phase of the deal, which involves 1 billion cubic feet a day, (cf/d) starting by 2011.

National Iranian Gas Export Company (Nigec), which has been negotiating the deal with Kuwait, says the gas will come from Iran’s South Pars fields, but is dependent on Kuwait constructing a trunk pipeline to the Iran border to receive the gas.

“There is an existing pipeline of ours that extends to the edge of our territorial waters,” Ghasemi Javid, gas marketing director at Nigec, tells MEED.

“A sub-pipeline needs to be constructed on the Kuwaiti side and we are negotiating that now.”

Javid says the price that Kuwait will pay for the gas will be based on “international market value”, and that further expansion could take capacity up to 1.5 billion cf/d.

The deal caps a busy period for Nigec, which recently finalised a deal to export up to 3 billion cf/d of gas to Oman, via a 200-kilometre pipeline from Iran’s Kish island (MEED 3:10:08).

Iran, which has the world’s second-largest gas reserves, initially signed a more limited deal with Kuwait in 2005 to export about 300 million cf/d of gas via a 260km pipeline under a 25-year contract.

However, following repeated changes of oil ministers in Kuwait and slow progress on the development of Iran’s South Pars field, the deal ultimately stalled.

The UAE’s Crescent Petroleum has also been in talks with Iran to import gas.

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