Iranian LNG destined for India in 2005
Iran is keen to move fast on development of the LNG project at South Pars - scared the gas will migrate south to Qatar's giant North Field, owned by RasGas.
Industry experts explain that Iran "has no unitisation agreement with Qatar", which divides gas reserves between the two countries. "Whoever sucks it out the quickest gets it all," learns this report, "and the Qataris are getting it out quicker than the Iranians." Luckily, agreement on the equity breakdown of the South Pars LNG project should be announced within weeks.
National Iranian Oil Company (NIOC) and BHP Petroleum are expected to hold 30% each, with 20% going to Petronas, and the balance 20% to "Indian market interests", presumably IOC and ONGC, or if they fail to agree, "anyone in India who can bring us the market. When signed, the agreement will be a, "fully fledged integrated cooperation agreement for the export of LNG from Iran to India." Iran and BHP have both agreed the draft.
Only Petronas has yet to signal its formal approval. First delivery of Iranian LNG to India is slated for 2005-2006.
Consortium partners are keen to avoid 'Phase 1' of the LNG invasion of India, which sees Enron land first supplies next year and others the year after. Instead, the South Pars consortium wants to wait for 'Phase 2' in 2005-2006, when it will be clear which LNG project survives and which dies.
A source said construction of the upstream LNG facilities at South Pars would take three years and begin in 'Phase 6' of the field's 8-phase development programme. Not in doubt is the destination for the first 'train': India."Our LNG will be the cheapest available." Really