Iran LNG Co to take EU to court over sanctions

Oil&Gas Materials 26 March 2013 15:07 (UTC +04:00)

Azerbaijan, Baku, Mar.26/ Trend F.Milad‎‏

Iran Liquefied Natural Gas Company has filed a complaint against the European Union at an international court over the sanctions imposed on the company.

The name of Iran LNG Co., an affiliate of the National Iranian Gas Export Company, has been put in the list of Iranian companies subject to EU sanctions, the Mehr News Agency reported.

According the company's officials, Iran LNG is hopeful of winning the case and therefore force the EU to take its name off the list.

Iran LNG is in charge of constructing the country's first LNG plant. The company, which is 49 per cent owned by the government, aims to process LNG and ship it from a terminal to be built between the southern port towns of Assaluyeh and Kangan using foreign technology and cash from Iranian banks and investors.

The Iran LNG plant is based in the country's southern Bushehr province in the Pars II special economic zone. The gas it wants to chill into a liquid would come from South Pars which together with the adjacent North Field in Qatar comprises the largest known gas deposit in the world. Qatar is the biggest exporter of LNG with an annual production capacity of 77 million metric tons.

Iran LNG expects to produce eight million tons of the fuel in its first year of operation and foresees a potential annual output of 10.8 million tons.

Iran holds 16 per cent of the global gas reserves and is the world's fourth largest producer after the U.S., Russia and Canada, according to data from BP Plc. While it is building or planning pipelines to export gas to regional neighbours such as Pakistan, India and Syria, the country also wants to develop the ability to produce the fuel in liquefied form for easier transportation to more distant markets.

LNG is a way of delivering natural gas capable of being transited to all corners of the globe, safely and reliably. Lacking the need to construct thousands of kilometres of pipeline, regional restrictions on finding customers, also the capability of signing short terms gas deal contracts, or even selling on the spot market, transportable by sea or land are other benefits of LNG.

Iran had aimed to start exporting LNG five years ago if not earlier. The Indian Oil Corp., a state-run refiner in India, discussed purchasing LNG as early as 2006. Zhuhai Zhenrong Co. of China agreed with the state-run National Iranian Oil Co. to buy fuel starting in 2008.