OMV seeks South Pars stake, LNG work in Iran

OMV has signed a heads of agreement with National Iranian Oil Co. to help develop South Pars gas field off Iran, participate in construction of a liquefaction plant, and export LNG.

Apr 24th, 2007

Uchenna Izundu
International Editor

LONDON, Apr. 23 -- OMV has signed a heads of agreement with National Iranian Oil Co. to help develop South Pars gas field off Iran, participate in construction of a liquefaction plant, and export LNG.

OMV wants to participate in the 12th phase of development of 500-tcf South Pars field in the Persian Gulf and work on the 8 million-tonne/year (tpy) Iran LNG project targeting European and Indian markets. Before the signing of this agreement, other participants involved in Iran LNG, which appeared to have stalled for several years, were the National Iranian Gas Export Co. 50%, BP PLC 25%, and Indian company Reliance 25%.

OMV said this proposal would complement the planned 7.3 million tpy LNG regasification terminal in Croatia that is scheduled to start in 2011-12. "Iran, with its substantial gas reserves, could be a source of supply," the company said. OMV has a 28.37% share in Adria LNG Study Co., which is carrying out a feasibility study for the Croatian terminal.

Reports from Iran said OMV has agreed to purchase 2.2 million tpy of LNG for Europe and would take a 10% share in Iran LNG. The reports added that OMV would also be granted a 20% interest in the upstream and downstream parts of phase 12 in South Pars field.

According to Iranian reports, Iran will also supply 5 billion cu m/year of gas to Europe through the proposed Nabucco pipeline, a �4.6 billion project to deliver Iranian and other Caspian region gas via Turkey to Austria. OMV is leading a consortium that has secured fast-track status from the European Commission for the 8 billion cu m/year pipeline because of its strategic importance in opening access to gas supplies outside Russia (see map, OGJ, June 13, 2005, p. 60).

OMV is not a new entrant to Iran. As operator, it is preparing a field development plan for the Mehr Block in the Zagros region. Last January it drilled an exploration well that reached a TD of 4,148 m and yielded an average flow rate of 1,040 b/d of oil on first production tests.

Contact Uchenna Izundu at uchennai@pennwell.com.

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