Repsol, Shell ‘near $4.3bn Iran LNG deal’

Spain's Repsol and Royal Dutch Shell expect to sign a preliminary deal with Iran in coming days for a $4.3 billion liquefied natural gas (LNG) plant and port terminal, a source close to the deal said.

Repsol and Shell hope to clinch a final agreement on the facilities, which would serve part of Iran's South Pars gas field, by late this year or early in 2008, said the source, asking not to be named.

'It's not a done deal yet,' said the source, who could not give a breakdown of how much of the deal would be for Repsol and how much for Shell.

Shell and Repsol may have a stronger incentive than some of their industry rivals to risk Washington's ire because they both have weak records on adding new oil and gas reserves,

John Browne, chief executive of rival BP, has said he will not invest in Iran because he is concerned about compromising his company's US interests.

Shell declined to comment on the report that a deal was close.

No production figure was immediately available for the Iran project but exports could start in 2011 or 2012, the source said.

LNG is super-cooled natural gas that can be transported on tankers.

The liquefication plant would cost about $2.5 billion and the port terminal and other infrastructure about $1.8 billion, the source said.