India has expressed its willingness to take a stake in a liquefied natural gas (LNG) terminal in southern Iran, Indian sources say.
“We have given a proposal to develop the discovered Farsi offshore block (now called Binaloud) on a standalone basis as well as to make it part of an integrated package – [a] stake in LNG terminal as well as development of the field,” a senior Indian official was quoted by official media as saying.
An Indian Foreign Ministry official said talks are under way between Tehran and New Delhi on the projects.
The Indian side has reportedly offered the formation of a consortium of state-owned and private entities for future cooperation between the two countries.
“If we are giving them sovereign guarantee, we do not see any problem in the consortium which would subsequently have private players also,” the Foreign Ministry official said.
The LNG project in question is Iran LNG which is located at Tombak Port in southern Iran. The LNG plant consists of storage and loading facilities.
“The options to get gas from Iran are either through a pipeline or by shipping it. Having a stake in the LNG terminal there will help in selling gas being produced from the Farsi block,” the Indian official said.
India has already shown determination for firming up commercial ties with energy-rich Iran which is a major supplier of oil to the Asian giant. India’s ONGC Videsh Ltd (OVL) has proposed to develop the Farsi block under a deal whose terms would comply with the newly unveiled Iran Petroleum Contract (IPC).
OVL is keen to develop Farzad-B gas reservoir which is estimated to hold 21.68 trillion cubic feet (tcf) of gas in place, of which 12.8 tcf of gas and 212 million barrels of condensate are recoverable.
Iran expects to bring five LNG projects online in the next three years, including a liquefaction facility which is 60% complete.
Several European companies have proposed to participate in the projects but negotiations have yet to be finalized. Royal Dutch Shell, Spain’s Repsol and France’s Total abandoned three LNG projects when the West imposed sanctions on Tehran in 2011, banning supply of energy equipment including high-tech liquefaction articles.
But the sanctions are expected to be lifted early next year as Iran’s historic nuclear deal with six world powers is close to taking effect.