Kuwait and Iran hope to finalise an agreement for the supply of Iranian gas to the country later this year after resolving some issues relating to the construction of a subsea pipeline, Hani Abdulaziz Hussein, deputy chairman and CEO of Kuwait Petroleum Corp said.

"We have reached an advanced stage of discussion with our counterparts in Iran," he said. "The matter of the construction of the pipeline and the issues related to the pipeline are complicated and need to be settled," he added.
The two sides held a meeting in Dubai to take the agreement further, he said. Asked when deliveries would start, Hussein said the pipeline would need two-and-a-half to three years to be built, after which gas flow could start.
Kuwait and Iran signed a framework agreement on the sidelines of an Opec meeting in Isfahan, Iran, in March this year for the supply 300 million cu ft per day of natural gas by subsea pipeline for 25 years starting 2007.
Iranian oil minister Bijan Zanganeh said that Iran hoped to firm up the deal in six months and issue tenders to build the 500 million cu ft per day capacity pipeline once a final agreement is in place.
The subsea section of the pipeline will run for 260 km with almost same distance onshore in Iran. Neither side has disclosed the commercial terms of the deal, sources said.
The two sides signed a memorandum of understanding in 2000 but have been hammering out details since, the sources added.
Roknoddine Javadi, managing director of the National Iranian Gas Export Co, has said the gas would be sourced from the giant South Pars field but not from a specific phase.
The Iranian gas would supply 35-40 per cent of the country's gas needs.
Hussein said that further down the line, he expected demand for natural gas in Kuwait to rise to 1-bil cu ft per day but he gave no timeframe.