“If the price is not corrected, the gas will not be delivered to them [Crescent],” says Gholamhossein Nozari, Iran’s Oil Minister, told Iran’s official energy news agency Shana. “We are very serious and if no agreement is arrived, the gas will be transferred over to the mainland for domestic consumption."

Iran has blamed the delay in the project on the company’s refusal to pay a higher price for the gas, but Crescent says a series of technical issues have delayed the start-up.

Under the proposals, 600 million cubic feet a day of gas will be supplied from Iran’s Salman field to Crescent, the major shareholder in Dana Gas, which operates a separate company with Dana to import the fuel.

Crescent was set up to deliver gas to utilities and industrial customers in the UAE, but has been in negotiations over the pricing of gas from Iran for more than 18 months (MEED 18:5:07).

The deal attracted controversy in Iran in 2006 when politicians claimed Crescent was not paying enough for the gas in view of the increase in global oil prices.