Dubai: The UAE’s natural gas producer, Dana Gas, said it was awarded Dh2.23 billion following the settlement of a dispute between its parent firm Crescent Petroleum and National Iranian Oil Company (NIOC). The dispute, which was initially over the low oil-linked gas price that Crescent had negotiated from NIOC in 2001, later ran into technical and political hurdles.
Dana Gas, which counts Crescent as one of its stakeholders, was expected to distribute the gas once it landed in UAE. This first arbitration is now over and covers the period of the first 8.5 years of the 25 year gas sales agreement from 2005 to 2014, said Dana Gas.
The final award has now been made against NIOC by the international arbitration tribunal in the first arbitration, and that the damages sum due to Dana Gas is $607.5 million (Dh2.23 billion).
The current award will “significantly bolster the balance sheet of Dana Gas,” said Dana Gas.
A second arbitration – for a much larger claim – on the remaining 16.5 years from 2014 to 2030 is 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.
“Dana Gas wishes to update the market with respect to its interest in the UAE Gas Project, which was to process, transport and market gas that was contracted to have been delivered by NIOC to Crescent Petroleum under the 25-year Gas Sales and Purchase Contract (GSPC),” said the energy firm in a statement. The gas was never delivered by NIOC.