Iran cancels first FLNG deal with Norway

8 February 2018 14:27 (UTC+04:00)

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Iran has cancelled its first FLNG deal with Norwegian Hemla following the criticism by some Iranian MPs.

In a press conference in Tehran on February 4, Iran’s oil minister Bijan Namdar Zanganeh announced that the deal is cancelled following the some criticism regarding the contract terms.

In October 2017, the National Iranian Oil Company (NIOC) signed first ever contract to export natural gas from of LNG (liquefied natural gas) with the Norwegian firm following months of negotiations.

Under the contract, Iran’s natural gas was planned to be converted to LNG in a floating LNG vessel (FLNG), belonging to Belgium's Exmar.

Based on the deal, the European firm was to purchase 200 million standard cubic feet of flared gas from offshore oilfields near Kharg Island over a period of up to 15 years. In its first phase, the site was projected to produce 500 metric tons of LNG and 200 tons of LPG per year.

Earlier, in December 2017, Asadollah Gharekhani, the parliament’s energy committee spokesman, said that a joint committee has been formed between Oil Ministry and the parliament’s energy committee in order to explore the issue.

The critics were accusing the Iranian oil ministry of signing a deal against the country’s national interests and setting an unacceptably low price for gas sell to the Norwegian side.

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