Iran comes to India looking for LNG partners

Vol 3, PW 26 (02 Feb 00) Midstream & Downstream

Iran is stepping up efforts to identify an Indian partner to include in a proposed LNG consortium for its South Pars gasfields.

In the first week of January, a delegation of Iranian officials was in Delhi and Mumbai for talks with Gas Authority of India, Indian Oil Corporation, Petronet-LNG and executives at Reliance Petroleum. A meeting was also held with Subbaram Narayan, Secretary, in the Ministry of Petroleum & Natural Gas.

A source tells Petrowatch the Iranians, are talking to anybody that might be interested, but will ultimately choose a party, that can confirm it has an assured market. For now the Iranians are talking only to Indian companies, but this report learns they have not excluded the possibility that their project, could fit into any LNG supply project in India, by implication Hazira, Dahej, Dabhol or Trombay.

They are also believed to admire Reliance Petroleum for its aggressiveness. In Iran meanwhile, negotiations to set up the LNG project are continuing with the three companies that form a consortium developing the South Pars 2 & 3 gasfields: Total (40%); Petronas (30%) and Gazprom (30%).

It is a sensitive period as discussions are ongoing. No precise location for the LNG project has yet been selected, but this report learns it will almost certainly focus on either South Pars 2 & 3, or South Pars 6, 7 and 8, which are under tender.

In India, ONGC chairman Bikash Bora confirms that both ONGC and IOC are pressing hard for an equity stake in the LNG consortium. In December, Bora and IOC Chairman Mohammed Pathan visited Iran to press their case.

IOC will no doubt try to exploit its close relationship with Petronas to force its way into the LNG project. The two are joint promoters of a proposed 2.5m t/y LNG import facility at Kakinada in Andhra Pradesh.