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India offers to invest $20 bn in Iran, seeks land, cheap gas

ndia has sought land and cheap natural gas for investing about $20 billion in new petrochemical, fertilizer and liquefied natural gas (LNG) facilities in Iran, primarily for importing these commodities into India.

Oil Minister Dharmendra Pradhan, who is in Iran with a delegation comprising industry executives on a two-day visit, discussed several issues related to the energy sector with his Iranian counterpart.

“Pradhan conveyed to the Iranian side that Indian companies could invest up to $20 billion and were interested in setting up petrochemical and fertilizer plants, including in the Chabahar SEZ, either through joint venture between Indian and Iranian public sector companies or with private sector partners,” a statement from the Indian oil ministry said, adding that in this regard, he requested Iran to allocate appropriate and adequate land in the SEZ.

He also requested the Iranian side for favourable treatment in the pricing of gas for India, besides the supply of rich gas at a competitive price and on a long-term basis for the life of the joint venture projects that the Indian companies are interested in setting up.

India is also keen to start a gas cracker unit and a liquefied petroleum gas (LPG) extraction unit in Chabahar. Both the sides also discussed ways of transporting gas to India from Iran including through a proposed Iran-Pakistan-India pipeline, said the statement.

The two sides also discussed the award of rights to develop Farzad-B gas fields to Indian firms as well as the pending payment by Indian refiners towards oil purchases from Iran but no concrete agreements were reached.

ONGC Videsh Ltd, the overseas investment arm of ONGC, along with its partners Indian Oil Corporation and Oil India had made the discovery in the Farsi offshore fields in Iran in 2008. The Farzad B block has estimated in-place reserves of 21.68 trillion cubic feet.

Tehran, which was India’s second largest crude oil supplier till 2010-11 and subsequently lost its share due to sanctions imposed by the US and the European Union, wants to increase its crude oil supplies to India. India imports close to 12 million tonnes of oil from Iran a year -- the fifth largest oil supplier to the country after Saudi Arabia, Iraq, Nigeria and Venezuela.

The issue relating to payment of dues by Indian refineries to Iran towards purchase of crude oil were also discussed. Pradhan conveyed that India was committed towards making payments as and when banking channels, acceptable to both sides, were available, said the government statement.

India and Iran are trying to enhance their energy ties following the lifting of some sanctions this year on Iran.

Iran wants India to boost its crude import from the West Asian nation quickly to take it to the level of pre-sanction years while India wants the lucrative purchase terms to continue.

Pradhan's visit to Iran comes comes nine years after the previous such visit by an Indian minister of petroleum and natural gas. It is the first after economic sanctions were lifted in January.

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Printable version | Oct 24, 2021 2:19:35 AM |

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