New Delhi: State-run explorer Oil and Natural Gas Corp (ONGC) is examining the viability of investment in Iranian gas projects, minister of state for petroleum and natural gas Jitin Prasada told lawmakers on Thursday.
“The investment decision would depend on the viability of the projects as established through detailed due diligence exercise to be carried out which includes aspect of liquefied natural gas (LNG) pricing,” the minister said in a written reply.
Iran has offered Indian firms a 40% interest in the development of phase 12 of its largest gas field South Pars in return for 6 million tonnes of LNG.
A consortium of state-run Indian firms, led by ONGC’s overseas investment arm ONGC Videsh, holds exclusive exploration rights for the offshore Farsi block.
ONGC and Indian Oil Corp each own a 40% interest in the Farsi block, and Oil India Ltd holds the remainder.
Prasada said master development plan to develop the offshore Farzad-B gas field of Farsi Block was under finalization in consultation with National Iranian Oil Co (NIOC).
In the master plan, Indian firms plan initial estimated investment of about $5.5 billion to develop the Farzad-B gas field and ship the LNG to India, he said.
Farzad-B gas field, which is estimated to hold initial in-place reserves of 12.5 trillion cubic feet (tcf), was estimated to produce gas for 30 years, the minister said.
In reply to a separate question, the minister said India was not willing to pay higher price than what was agreed in June 2005 to buy 5 million tonnes of LNG annually from Iran.
Indian oil firms had signed a 25-year deal with National Iranian Gas Export Co in June 2005 to buy 5 million tonnes of LNG per year at a price linked to $31 a barrel of crude oil, which translates to $2.9 per million British thermal unit.
But Tehran has not ratified the agreement because of a sharp rise in oil prices.