Despite Dana Gas, a subsidiary of United Arab Emirates (UAE) Crescent Petroleum, announcing that it will start receiving shipments of natural gas from Iran in mid 2008 after two years of delays, the deal remains far from settled.

Iran and the privately-owned Crescent have been negotiating over the price of gas exports from the Iranian offshore Salman field to the UAE since the first deliveries were expected in 2006, but, to date, no gas has been delivered.

Hamid Jaafar, Dana Gas's executive chairman, optimistically reported to the company's annual general assembly meeting in April that preparations to receive Iranian gas had been completed, and that revenues are expected to surge from gas sales this year.

But Iran's oil minister Gholamhossein Nozari countered at a news conference: "If the price is not corrected, the gas will not be delivered to them (Crescent). We are very serious and if no agreement is arrived at, the gas will be transferred over to the mainland for domestic consumption."

An Abu Dhabi-based oil source expressed scepticism to Emirates Business 24/7 over the completion of the deal, saying: "The latest statements might only reflect Dana's hope that Iran would begin pumping gas... but I do not think this will happen without an agreement by Dana to pay higher prices because Tehran seems adamant."