Petroliam Nasional Bhd (Petronas) is still assessing its liquefied natural gas (LNG) investment in Iran’s South Pars after its partner, French oil firm Total pulled out from the US$11.2 billion (RM36.6 billion) gas project.
Petronas president and chief executive Tan Sri Mohd Hassan Merican said: “We continue to be interested in operating in Iran. I have read the announcement by Total, but Petronas remains interested in the country.”
Petronas said it had yet to make a final investment decision as a result of spiralling costs. “Because of the increase, the economic viability of the project as previously proposed is affected… we also have not completed our discussion with the Iranian government,” Mohd Hassan said.
Asked if Petronas would commence the projects without Total, Mohd Hassan said: “As a company capable of developing LNG projects, we have the technological capabilities as proven in Malaysia and Egypt. But there are other factors, so we have to make an assessment.”
Total, together with Petronas, had planned to develop Phase 11 of the South Pars field to produce LNG.
Total, which holds 40% of the South Pars development, froze its project as it was “too politically risky to invest in Iran at present”, its chief executive Christophe de Margerie said earlier this month. Petronas, which was part of the South Pars consortium, holds 10%.
Iran has the world’s second-largest reserves of natural gas after Russia, and the South Pars field in the Gulf has about 500 trillion cubic feet or 14 trillion cubic metres of gas, representing some 8% of world’s reserves.
Total’s pullout came after Iran’s missile test last week raised political tensions between the country and the West. Other European companies that withdrew from the country included Royal Dutch Shell, Spain’s Repsol and Statiol of Norway.
Petronas’ total LNG production increased to 24.1 million tonnes from 23.3 million tonnes on higher production from its LNG plant in Bintulu. Almost 60% of the Bintulu’s production was exported to Japan, 28% to South Korea and the remaining 12% to Taiwan.
Meanwhile, Mohd Hassan said that the proposed reverse takeover of Ramunia Holdings Bhd would be completed in the fourth quarter this year. MISC Bhd had proposed to sell its subsidiary Malaysia Marine & Heavy Engineering Sdn Bhd (MMHE) to Ramunia for RM3.2 billion via a share swap. Once the takeover is completed, MISC would hold more than 70% in Ramunia.
MISC, a 62% unit of Petronas, is the world’s largest shipper of LNG.
