Iran has allocated $450m for its planned Iran liquefied natural gas (LNG) project at Tomback on the Gulf coast.

Talks are currently under way with Iranian banks for the allocation of $900m from the country’s Foreign Exchange Reserve Fund, says Ali Kheyrandish, managing director of Iran Natural Gas Liquefaction Company, state-run Mehr news reports.

The project is 40 per cent complete, but it will require an additional $3bn to complete the project, on top of the $1.5bn already spent, according to Kheyrandish. 

The company could begin sales within two years, although with Iran’s current political environment, analysts say the plant could start up in 2016 at the earliest.

Upon completion, the plant will produce 10.8 million tonnes a year (t/y) of gas from two production trains. It will be fed by 995 million cubic feet a day of gas from phase 12 of the South Pars field.

Iran LNG is the first of Iran’s planned natural gas projects. The second, Pars LNG, a joint venture of National Iranian Oil Company (NIOC), France’s Total and Malaysia’s Petronas aims to produce 10 million t/y, but with costs escalating there has been little progress.  

Shell signed an initial agreement with National Iranian Oil Company (NIOC), along with Spain’s Repsol in 2002 for the development of phases 13 and 14 of the South Pars field. The project would be integrated with the Persian LNG project, which aims to build two trains producing about 16.2 million t/y.

After eight years of drawn out talks and no decision from the European oil majors, NIOC opted to remove the partners from the scheme at the end of May. Shell and Repsol have held talks with China’s Sinopec about the takeover of their role in the Persian LNG project, but there has been little progress so far (MEED 16:6:10).