IRAN AND LIBYA SANCTIONS ACT (ILSA): SHARJAH/UAE

C O N F I D E N T I A L ABU DHABI 003767 SIPDIS DEPT FOR NEA/ARPI, EB/ESC/TFS, EB/ESC/IPC E.O. 12958: DECL: 09/06/2015 TAGS: ETTC EPET ENRG PREL ECON IR TC SUBJECT: IRAN AND LIBYA SANCTIONS ACT (ILSA): SHARJAH/UAE IRANIAN GAS PROJECT REF: A. STATE 156227 ¶B. ABU DHABI 3440 ¶C. ABU DHABI 3237 ¶D. DUBAI 265 Classified By: Ambassador Michele J. Sison, for reasons 1.4 (b and d). ¶1. (C) On September 4, Ambassador stressed our opposition to investment in Iran's oil sector to MFA U/S Abdullah Rashid Al-Noaimi, using Ref a talking points. She emphasized deep USG concerns about Iranian actions and policies, including pursuit of WMD and delivery systems, support for terrorism, opposition to the Middle East Peace Process, and Iran's abysmal human rights record. Ambassador stressed that Crescent Petroleum's plans to bring Iranian gas to the UAE and to create an infrastructure to do so are troubling. She noted that this was an especially unfortunate development at a time when Iran, breaking its agreement with the EU-3, has restarted uranium conversion activities, which are the first step toward producing weapons-grade fissile material. Ambassador explained that, despite Dana Gas denials, the volumes involved and the infrastructure being created indicate that the source of the gas could only be from Iran. ¶2. (C) U/S Al-Noaimi took the Ambassador's points on board, and said that the UAEG understands the USG's concerns about Iran. He agreed that the UAEG and the USG shared concerns about Iran's nuclear program. Ambassador urged that the UAEG reconsider this project, noting that the support of governmental entities within the UAE (the Emirate of Sharjah) for the project was troubling. Al-Noaimi agreed to "take another look" at the project. ¶3. (C) Earlier, during a previously scheduled August 26 visit to Ras Al-Khaimah, which would be a major customer of Dana Gas, CG Dubai made the same points to Ras Al-Khaimah (RAK) Crown Prince Sheikh Saud Al-Qasimi, who has long been aware of USG concerns related to Iranian gas. Sheikh Saud, who has argued in the past that resource-poor RAK would need access to Iranian gas in order to further develop its economy, made it clear that Sharjah's Dana Gas IPO would benefit RAK. While not explicitly acknowledging that the gas would be coming from Iran, he quipped that "we would prefer American gas; unfortunately we were given no choice about who our neighbors would be." ¶5. (C) Comment: We will continue to raise our opposition to this program with appropriate federal and emirate level officials. Ambassador plans to raise this with the UAE Energy Minister on his return to the UAE and CG Dubai will raise it again with Emirate of Sharjah leadership. End Comment. SISON