New Delhi: Oil and Natural Gas Corporation (ONGC) plans to use the facility, that Iran LNG is creating on southern Iranian coast, to liquefy the gas it will produce from the Farsi fields in the Persian Gulf.
ONGC and its overseas subsidiary ONGC Videsh Ltd along with Hinduja Group and Petronet LNG last week agreed to take 20% stake in the $4.35 billion liquefied natural gas export facility Iran LNG is building at Tombak Port.
“Though this plant is to turn gas produced from South Pars Phase-12 (SP-12) into liquid (LNG) for exports, we are looking at using it also for turning gas from the Farzad-B gas field in the Farsi block into LNG,” a company official said.
OVL is the operator of the Farsi block with 40% interest, where it along with Indian Oil (40%) and Oil India (20%) has submitted a $5.5 billion plan to bring to production the Farzad-B gas find.
“Our stake in Iran LNG can go up to 40%,” he said adding ONGC wanted to ship backhome 6-8 million tonnes a year of LNG to be produced from Farsi and SP-12 fields.
OVL and Hinduja firm Ashok Leyland Projects Services (ALPS) last week signed agreements to take 40% stake in SP-12. Phase 12 is the largest of the 28 Phases in which the South Pars gas field in the Persian Gulf has been divided and will cost $7.5 billion.
So far, Iran has agreed to give India up to 6 million tonnes per annum of LNG for its efforts in SP-12 and Farsi gas field.
Iran does not give foreign firms ownership of oil and gas and instead pays a fixed fee on the investment made. The Indian company would, however, get LNG in return.
The SP-12 field is to produce 3 billion cubic feet per day of gas, two-thirds of which is to be converted into LNG for exports.
Gas from the SP-12 field would go to Iran LNG, which is building a $4.35 billion plant at Tombak Port by 2011, to turn it into liquid state so that it can be shipped in cryogenic vessels.
The official said OVL had in April submitted a master development plan for gas discovery in the Farsi offshore block. The discovery, which was subsequently named Farzad-B gas field, has in-place reserves of up to 21.68 trillion cubic feet gas of which recoverable reserves may be 12.8 Tcf.
The development of both SP-12 and Farzad-B fields would take 7-8 years.
In the SP-12 field, Petropars—a subsidiary of National Iranian Oil Co—would hold 40% while the remaining 20% would be with Sonangol of Angola. At 35 tcf, it contains almost 7% of reserves in the South Pars gas field.
Iran LNG plant is being built at Tombak Port, about 50 km north of Assaluyeh in the Bushehr province. Work on the LNG plant started in 2007. The project includes two LNG trains each with 5.4 MT of LNG per annum capacity. The project is expected to be operational by January 2011.
The liquefaction plant will be developed in two phases, each projected to produce 10.5 MT of LNG annually.