The agreement was reportedly reached almost 3 months ago and the new price fixed for Iran's gas is five times the previously proposed one. The deal was signed by the law office of the Islamic Republic of Iran's President and the negotiating officials of the UAE.
In 2001 the National Iranian Oil Company (NIOC) of Iran and Crescent Petroleum signed a 25-year gas contract, with a price linked to oil. Based on the contract Iran was supposed to export 5 billion cubic meters of rich gas to UAE.
But oil prices hiked up in the next years and Iranian officials asked for a revision to the price method and blamed the price dispute for delivery delays which was supposed to be exported to the UAE in 2005.
The low gas price turned the deal to one of the most controversial agreements in the history of Iran's oil industry that even some officials indicated that the contract would possibly be revoked.
Based on the deal Iran was committed to construct a pipeline extended from Salman gas field to the United Arab Emirates which was to transfer 500 million cubic meters a day.
Ordered by Petro Iran Development Company the pipe building stage of the project was implemented by Engineering and Constructing Naval Utilities Company.
The project included building an underwater pipeline with 30 inches caliber and 146 kilometers long which is extended from Salman field to Sirri Island followed by building an underwater pipeline with 30 inches caliber and 66.6 kilometers long from Sirri to AP oil platform in Mubarak oil field.
Almost a decade after signing the agreement last year Crescent Petroleum asked an international arbitration tribunal to settle a dispute over a gas deal between the company and NIOC. At that time Taheri, the general manager of Crescent branch in Iran told Khabar Online: "The long-standing argument of the UAE-based company and Iran was referred to an international arbitration tribunal and both parties are providing related evidences and documents.
He said that Crescent has submitted enough documents showing that the National Iranian Oil Company has failed to fulfill the contract: "Crescent was by no means interested to seek international arbitration, but Iranian officials did not show their willingness to negotiate on the issue and resolve the problem," he added.
Finally last year the case of selling gas to the United Arab Emirates was referred to the law office of the Islamic Republic of Iran's President to be observed and the resolved.
At the same time general manager of the National Iranian Gas Company (NIGC) Javad Owji asserted that the plan for exporting Iran's natural gas to Sharjeh, UAE under Iran-Crescent contract is being considered by the law office of the Islamic Republic of Iran's President: "However the Ministry of Oil is simply responsible for providing technical and legal advice to the office," he told the correspondents.
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