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Shell pulls out of Iran gas deal under US pressure
Oil major Royal Dutch Shell has pulled out of a planned gas project in Iran
- Reuters
- Published: 23:37 May 10, 2008
London: Oil major Royal Dutch Shell has pulled out of a planned gas project in Iran after coming under pressure not to participate from US lawmakers who were concerned about Iran's nuclear programme.
A spokeswoman said yesterday that the world's second-largest non-government-controlled oil company by market capitalisation was pulling out of Phase 13 of the giant South Pars gas field but may yet join later stages of the field's development.
Shell, Spain's Repsol and the National Iranian Oil Company (NIOC) signed a Memorandum of Understanding in January 2002 to develop Phase 13 in a project to be known as Persian LNG (PLNG).
At the time, Shell said deliveries of liquefied natural gas - gas cooled to liquid under pressure for transportation in special tankers - could begin in 2007.
However, United Nations sanctions on Iran related to its nuclear programme, and criticisms of the deal from US politicians and investors, slowed progress.
Meanwhile Iran grew impatient and threatened Shell with eviction from the project if it did not commit formally.
The spokeswoman for the Anglo-Dutch company said: "We have agreed the principal of substitution of alternative later phases for the PLNG project so that NIOC can proceed with the immediate development of Phase 13."
She would not give a reason for the decision. Repsol was not available for comment.
Iran will now need to find new partners for the project. Media reports have suggested Russia's Gazprom, Indian Oil and Chinese companies could join, as they are expected to be less susceptible to US political pressure, but the companies have limited experience in LNG.
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