‘Norwegian company after major gas deal with Iran’

Norway’s oil and gas giant Hemla Vantage seeks to seal a $600 million energy deal with Iran on the production and export of liquefied natural gas (LNG) and liquefied petroleum gas (LPG), a report says.

According to The Financial Times report, the contract will be a joint venture between the Norwegian firm and Iran’s Kharg Petrochemical Company (KPC), to produce and export LNG and LPG by 2017.

“Hemla will secure debt financing and will be 50/50 equity partners with KPC/KGRC [the latter is a sister company of the former],” FT quoted Gerhard Ludvigsen, a founding member of Hemla group and director of Hemla Vantage, as saying.

“We are inspired that Iran really wants to shift from a traditional player to a modern player. Nobody would believe that Iran could be the first in the world to produce LNG from a floating production vessel (FLNG) in 2017,” he added.

Iran sits on the world’s fourth-largest oil and second-largest gas reserves, and is among the world’s top 10 oil and top five natural gas producers.

The joint venture will purchase 200 million standard cubic feet of flared gas from offshore oilfields near Kharg Island in the Persian Gulf over a period of up to 15 years.

In its first phase, the site is projected to produce 500 metric tons of LNG and 200 tons of LPG per year. The FLNG barge, produced in China and ready to be shipped to reach Kharg Island by October, will be leased from Exmar, a Belgian company, the report added.

Iran and Kharg Island have a lot of facilities including jetties, pipelines and storage which make projects much easier and economically justifiable, said Ludvigsen.

He added that European banks, including German institutions, are ready to finance the project showing “that banks are opening up and are now being positive to engage with Iran.”

Iran previously pursued three key LNG projects; Iran LNG, Pars LNG and Persian LNG. However, they were abandoned over the past few years over technical issues mostly pertaining to sanctions against investments in Iranian energy projects.

The country is already working on a plan to pipe natural gas to Oman and use the liquefaction facilities of the Persian Gulf sultanate to export LNG to overseas markets.