Hinduja Group-ONGC Videsh may bag oil and gas field in Iran

New Delhi, Jul 2 (UNI) Iran government today expressed its willingness to sell half of the liquefied natural gas (LNG), to be produced from its gigantic the South Pars oil field, to an Indian consortium.

Iran Oil Minister Gholam Hossein Nozari, on the sidelines of the 19th World Petroleum Congress at Madrid, said Tehran is willing to sell half of the LNG to be produced from the South Pars Phase-12 to the Indian consortium (Hinduja Group-ONGC Videsh Ltd).

In August last year, Hinduja Group had struck a deal with the Switzerland-registered Naftiran Intertrade Co (NICO), an arm of National Iranian Oil Co (NIOC), for a 45 per cent stake in Azadegan oilfield and 60 per cent in the development of Phase-12 of the giant South Pars gasfield.

''ONGC will get half of Iran LNG (output) provided that invest double of that share in upstream field development,'' Mr Nozari said.

The South Pars gas field in the Persian Gulf is to be developed in 24 phases, with Phase-12 being dedicated to the Iran LNG project, which is wholly-owned by NIOC.

The estimated cost for developing the gas field has gone up to 5.2 billion dollars from 3.5 billion dollars estimated earlier.

The project is designed for an initial capacity of two trains of five million tonnes of LNG per year each, a statement said.

Mr Nozari said, ''We are in discussions with them (Hinduja-OVL),'' but did not give a timeline for making a decision.

The NICO board has now formally approved of the proposed collaboration for development of the two fields, the statement added.

Iran, which holds second largest oil and gas reserves after Saudi Arabia, is the most important country within the second circle of India's security parameter.

The estimated cost for developing Azadegan field has increased from 1.25 billion dollars to 2.5-3 billion dollars.

Azadegan field will produce 1,50,000 barrels per day of oil in the first phase that would double subsequently, while South Pars Phase-12 can produce up to 12 million tonnes of gas that will be converted into LNG at a two billion dollar facility.

Hinduja-OVL combine has sought supply commitment for the entire oil produced from Azadegan field and 7.5 million tonnes of LNG from South Pars Phase-12.

Iran does not give companies a stake in its oilfields, but signs buyback agreements where companies hand over operations of fields to NIOC after development and then receive fixed returns on their investment.

NICO has been offered a stake in the 15 million tonnes a year refinery, one million tonnes petrochemical and 7.5 million tonnes LNG receipt facility planned by Hinduja-ONGC at an investment of over 10 billion dollars in India.

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