Iran Offers India 40% Stake in South Pars
NEW DELHI (Dow Jones), Dec. 1, 2009
National Iranian Oil Co., or NIOC, has offered India a 40% interest in phase 12 of the South Pars gas field and 6 million metric tons of liquefied natural gas a year, its managing director said Tuesday.
India's state-run Oil & Natural Gas Corp. Ltd. and Hinduja group will each get 20% interest in South Pars, which will need an investment of $7.5 billion, Seifollah Jashnsaz told reporters after second day of talks with Indian companies on investments in Iran.
South Pars, the world's largest gas reservoir, is shared by Iran and Qatar. Phase 12 is the southeastern block of the field and covers 150 square kilometers.
Naftiran Intertrade Co., a unit of NIOC, will hold 40% in South Pars Phase 12 and the balance will be held by Angola's state oil company Sonangol, Jashnsaz said.
Iran has also offered ONGC, Hinduja group and India's Petronet LNG Ltd. a stake in Iran LNG Co., Jashnsaz said. The LNG project aims to produce 3 billion cubic feet of gas a day from south pars Phase 12.
"Both the opportunities put together will result in supply of up to 6 million tons of LNG to India," ONGC Chairman R.S. Sharma said.
India has the option to raise its investment in South Pars. For every extra dollar investment, India will get a right in the downstream LNG project, Jashnsaz said.
Iran may also help Indian companies raise funds for the projects, with Naftiran Intertrade depositing its foreign exchange with Indian banks, Sharma said.
The investments in Iranian projects are subject to board and federal government approvals, Sharma said. NIOC's Jashnsaz also said ONGC's overseas investment arm, ONGC Videsh Ltd., has been given responsibility to develop Farsi gas field in the Persian Gulf.
OVL and India's state-run refiner Indian Oil Corp. each own a 40% stake in the 3,500 square kilometer Farsi offshore block that was awarded to the consortium in 2002. Oil India Ltd. owns the remaining 20%.
Iran will also restart negotiations with India on India-Pakistan-Iran gas pipeline in December in New Delhi, Jashnsaz said.
The 2,775-kilometer pipeline project has been stuck due to several issues like gas pricing, project structure, security of supplies.
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