July 13, 2008

Gazprom, Iran Sign Memorandum of Understanding

MOSCOW. July 13 (Interfax) - Russian natural gas monopoly Gazprom (RTS: GAZP) and the National Iranian Oil Company (NIOC) have signed a memorandum of understanding, Gazprom said on Sunday.

A joint working group would be formed to put the memorandum's provisions into practice, Gazprom said in a press release posted on its website.

The memorandum is the result of a visit to Iran by a Gazprom delegation led by the company's chief executive, Alexei Miller, who had a meeting in Tehran with Iranian Oil Minister Gholam Hossein Nozari and NIOC Managing Director Seyfollah Jashnsaz.

"The meeting participants discussed priority measures to build up cooperation in the oil and natural gas sector, including a proposal to set up a joint venture to put into practice projects to explore and develop gas and oil fields and build oil- and gas-refining and transportation facilities in Iran," the release said.

"The two sides also reached an agreement to set up a joint venture for oil and gas projects in Iran, Russia and third countries," it said.

The Iranian side also asked for long-term Russian gas imports into northern Iran, the release said.

Gazprom, French company Total and Malaysian company Petronas are involved in a project to develop the South Pars/North Dome gas condensate field in the Persian Gulf.

NIOC specializes in prospecting for and producing hydrocarbons within and outside Iran and possesses exclusive rights to Iranian oil and gas resources.

Iran holds second place in the world for its volume of proven gas reserves - 28.13 trillion cubic meters.

In 2006, it produced 105 billion cubic meters and consumed 105.1 billion cubic meters of gas. The same year it exported 5.7 billion cubic meters of gas to Turkey and imported 5.8 billion cubic meters of gas from Turkmenistan.

Iran is building up it gas consumption by about 7% per year.

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