US embassy cable - 05KUWAIT1089

C O N F I D E N T I A L KUWAIT 001089 
 
SIPDIS 
 
STATE PLEASE PASS DEPARTMENT OF ENERGY FOR IE 
STATE FOR NEA/ARPI 
EB/ESC/IEC FOR GALLOGLY, DOWDY, MCMANUS 
 
E.O. 12958: DECL: 03/17/2015 
TAGS: ENRG, EPET, KU, IR, KUWAIT-IRAN RELATIONS, OIL SECTOR 
SUBJECT: KUWAIT-IRAN GAS - A DONE DEAL 
 
REF: A. KUWAIT 0943 
 
     B. 2004 STATE 166919 
 
Classified By: Economic Counselor Stephen Carrig for reason 1.4 (d) 
 
1.  (C) Econ Counselor and Econ Officer met March 12 with 
Ministry of Energy Undersecretary Issa Al-Own to follow up on 
earlier discussions of Kuwait's options for meeting its gas 
needs (Ref A).  Al-Own said that there was a "good chance" 
that Kuwait and Iran might discuss a potential gas export 
deal on the sidelines of the Isfahan OPEC meeting. Clarifying 
a March 12 newspaper report on the deal, Al-Own said that the 
two sides had come to an agreement on some "outstanding 
technical points" already and that they could now "resume 
negotiations."  He said that the plan called for a pipeline 
to carry 300 million cubic feet (mft3)/day and that the two 
sides would likely look for a private investor to build the 
pipeline. 
 
2.  (C) Al-Own pointed out that Kuwait would face critical 
gas needs in 2008, once Kuwait's new petrochemical plants 
come online.  With an estimated one year of design and two 
years of construction needed for the pipeline, Al-Own said 
that Kuwait would like to move the Iran deal forward "like a 
rocket."  Al-Own continued that the disputed Al-Durra 
offshore gas field (Ref A) was "really a border issue" and 
that the Foreign Ministry was actively trying to resolve the 
dispute through diplomatic channels.  He said that, once the 
Foreign Ministry gives the go-ahead, the Ministry of Energy 
would beging drilling in the Al-Durrah field. 
 
3.  (U) March 14 newspapers quoted unnamed sources as saying 
that Minister of Energy Shaykh Ahmed Fahd Al-Ahmed Al-Sabah 
is expected to sign a memorandum of understanding on the gas 
deal while at Isfahan and the Energy Minister himself was 
quoted on his departure as saying that Kuwait and Iran "will 
complete negotiations and I hope to reach an understanding 
during this visit" regarding the import of 300 mft3/day of 
Iranian gas.  (Note: March 16 online news sources reported 
that the two countries had signed a $7 billion, 25-year MOU 
March 15 for Iran to export 300 mft3/day of gas daily to 
Kuwait, starting in 2007.) 
LEBARON