Wednesday, Jul 13, 2011
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By Hassan Hafidh
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Crescent Petroleum expects an arbitration tribunal to issue a decision in February 2012 on its natural gas dispute with the National Iranian Oil Co., or NIOC, Crescent's chief executive said Wednesday.
"The hearing has been set for February 2012 in The Hague and the tribunal decision is internationally binding," Majid H. Jafar told Dow Jones Newswires on the sidelines of an Iraqi oil conference here.
Crescent and NIOC signed a 25-year contract worth up to $1 billion in 2001, under which the Islamic Republic of Iran agreed to pipe some 500 million cubic feet a day of natural gas from the Salman offshore field to Sharjah, UAE.
Supplies were supposed to commence in December 2005, but were affected by delays to the Iranians' building of a 280-kilometer pipeline. This was completed in 2006 but supplies never began.
This forced Crescent to seek an international arbitration tribunal in 2009 "to protect our right and those of our customers and stakeholders in the UAE," Jafar said.
In 2010 Crescent held discussions with the Iranian side.
"We received some small quantities of gas for commissioning and testing in summer last year, but when the pressure was raised leaks were discovered in the Iranian pipelines," he said. "We understand the NIOC is endeavoring to repair the pipeline but in the meantime we resume the arbitration process."
Crescent Petroleum has invested millions of dollars to build its pipeline and associated transport infrastructure for the supply of Iranian gas, mostly to feed power stations in Sharjah.
-By Hassan Hafidh; Dow Jones Newswires; +962 799 831 831; hassan.hafidh@dowjones.com
(END) Dow Jones Newswires
13-07-11 1416GMT
