for a decade is bending over backwards not to offend the Islamic Republic and to try to secure the gas.
The delay of the gas supply from Iran to the UAE under a contract signed nearly 10 years ago was because of technical not pricing reasons, the head of the company which signed the deal was quoted as saying Sunday. But many Iranians have said the exact opposite over the years; they have complained that Iranian officials ignorantly signed a contract with too low a price attached.
Mohammed Hameed Jaafar, executive president of Sharjah-based Crescent Petroleum, said an international arbitration over the delay is under way and a ruling is expected at the end of this year or by early 2012. The firm is clearly hoping that Iran will be told it must comply with the contract it signed with Crescent.
Quoted by the Sharjah-based Arabic language daily Al-Khaleej, Jaafar said media reports that Iran delayed supplies because it wanted higher prices were not true.
He said supplies had been due to begin by the end of 2005 but they were delayed after technical problems obstructed the construction of Iranian export and gas treatment installations for five years despite the completion of a 280-km underwater pipeline in mid 2006.
“This is the real reason for the delay in the supply of Iranian gas to Sharjah…. It has nothing to do with pricing or politics as the media have speculated.”
But news reports from the signing indicated the raw gas was to be piped directly to Sharjah and not be processed in Iran.
Jaafar also said the National Iranian Oil Company (NIOC) began supplying low-pressure gas in small quantities to test the pipeline. “Unfortunately, when pressure was raised in the pipelines, NIOC discovered a leak in its pipes in the sea and this meant a delay of additional months,” he said..
“At the same time, in order to protect our rights,… we started international arbitration measures in The Hague in 2009 to force NIOC to meet its commitments and bear damages.… We are going ahead with this matter and expect to receive a final ruling at the end of this year or by early 2012.”
In 2001, Crescent Petroleum signed a major supply agreement with the NIOC to import gas from the offshore Khuff reservoir associated with the Salman oilfield. But there have been repeated calls from Iranian officials to cancel the agreement and direct the contracted gas for domestic use.
The contract to send gas to the UAE was signed when oil and gas prices were relatively low. The agreement calls for the supply of nearly 116 billion cubic meters of natural gas to the UAE over 25 years.