An international arbitrational tribunal has awarded UAE-based energy firm Dana Gas $607.5 million in damages in one of its gas supply dispute cases with the National Iranian Oil Company (NIOC).

In a statement to the Abu Dhabi Securities Exchange (ADX) where its shares trade, Dana Gas said a second arbitration with a much larger claim is currently underway, with the final hearing fixed for October of next year (2022) in Paris, and for which a final award on damages is expected the following year in 2023. 

At the heart of the dispute is a 25-year contract signed by NIOC and Crescent Petroleum in 2001 for Iran to supply 600 million cubic feet of gas by pipeline to Sharjah, UAE.

The supply was intended to begin in 2005, but NIOC had not complied due to a dispute over the contracted price as gas prices have increased since then. Since June 2009 the Gas Sales and Purchase Contract (GSPC) between the two companies has been under international arbitration with Crescent seeking a multi-billion-dollar compensation.

Sharjah-based Dana Gas, which is 21 percent owned by Crescent Petroleum, was to process, transport and market the gas once it arrived.

In Tuesday’s statement Dana said the $607.5 million award will significantly bolster its balance sheet.

(Reporting by Brinda Darasha; editing by Seban Scaria)

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