Sector News

Total seeks waiver from US authorities for South Pars 11 project in Iran

May 16, 2018
Energy & Chemical Value Chain

Total said today that unless it is granted a specific waiver for its huge South Pars 11 (SP11) energy project in Iran it will have to wind down all related operations.

The news follows President Donald Trump’s announcement on 8 May that the United States is to withdraw from the Joint Comprehensive Plan of Action (JCPOA) agreement and reinstate US sanctions against Iran that were in force before the JCPOA’s implementation, subject to certain wind down periods.

“Total will not be in a position to continue the SP11 project and will have to unwind all related operations before 4 November 2018 unless Total is granted a specific project waiver by the US authorities with the support of the French and European authorities. The project waiver should include protection of the company from any secondary sanctions as per US legislation,” Total said in a statement today.

The company and partner Petrochina on 4 July 2017 executed the contract covering the SP11 project in full compliance with UN resolutions and US, EU, and French legislations applicable at the time. SP11 is a gas development project dedicated to the supply of domestic gas to the Iranian market. Total says it cannot afford to be exposed to any secondary sanctions, which might include the loss of financing in dollars by US banks for its worldwide operations (US banks are involved in more than 90% of Total’s financing operations); the loss of its US shareholders, which represent more than 30% of Total’s shareholding; or the inability to continue its US operations. US assets represent more than $10 billion of Total’s capital employed.

Total says it will not make any further commitment related to the SP11 project and, in accordance with its contractual commitments vis a vis the Iranian authorities, is engaging with French and US authorities to examine the possibility of a project waiver.

Total has to date spent less than €40 million ($47.2 million) on the SP11 project. It says that a withdrawal from SP11 would not impact its production growth target of 5% of compounded annual growth rate between 2016 and 2022.

By Natasha Alperowicz

Source: Chemical Week

comments closed

Related News

July 14, 2024

Europe ethylene spot prices turn firmer on demand, feedstock, looming cracker turnarounds

Energy & Chemical Value Chain

European ethylene spot prices have firmed week on week on the back of better-than-expected demand amid higher feedstock values and an increasing focus on upcoming planned cracker maintenance outages. Spot deals this week have been reported at discounts of 32-35% on the pipeline, prior deals had been at discounts of around 38-39%.

July 14, 2024

Marcel Imwinkelried appointed new Siegfried CEO

Energy & Chemical Value Chain

He will succeed Reto Suter, who has led the Siegfried Group as CEO ad interim since the departure of Wolfgang Wienand on May 1, 2024. Suter will now focus on his role as Chief Financial Officer for Siegfried. Wienand will become CEO of Swiss competitor Lonza.

July 14, 2024

Honeywell acquires Air Products’ LNG technology, business for $1.8B

Energy & Chemical Value Chain

Honeywell Inc. (Charlotte, North Carolina) has reached agreement to acquire Air Products’ (Leigh Valley, Pennsylvania) liquefied natural gas process technology and equipment business for $1.81 billion. The deal is expected to close before the end of the year. The price represents a multiple of 13 times the unit’s estimated 2024 EBITDA.

How can we help you?

We're easy to reach