Under a cooperation agreement, NIOC would supply up to 530 million cubic feet of gas per day to LNG Ltd’s planned LNG production project on Qeshm Island in Iran.

The company reiterated that it has partnered and agreed to transfer 35% of its stockholding in its Iranian subsidiary, LNGIQ, to that county’s Civil Pension Fund Investment Fund.

The Qeshm project is intended to be a 3.5 million tonne (MMt) per year plant producing LNG for sale to India or East Africa, and may be developed in three stages. The first phase, with an annual production capacity of 1.15MMt, is targeting commissioning and the first LNG shipment in the first quarter 2010.

NIOC, which is responsible for all of Iran’s petroleum, has identified several gas fields close to the proposed Qeshm plant site for potential development. In addition, all three parties have agreed to start gas sale negotiations.

LNG Ltd managing director Maurice Brand said he was confident that financial close would be reached this time next year.

“In order to fast-track the project, LNGIQ will immediately proceed to select its preferred LNG site on Qeshm Island,” he said.

“The Qeshm LNG Plant will benefit significantly from the work undertaken by LNG Ltd over the past 18 months in relation to its proposed Padang LNG Project, in Central Sulawesi, Indonesia, including front-end engineering design work, selection of major items of equipment and up-to-date detailed costing and development scheduling.”

Brand said both LNG projects involved similar sized production trains, construction techniques and project scheduling, and were each expected to take about two years to build.