iran signs new energy deals

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    India and Iran sign $40b LNG deal

    * Delhi will import 7.5m tonnes LNG a year starting 2009 and running for 25 years

    NEW DELHI: India has signed a $40 billion deal with Iran to import liquefied natural gas and join in developing three Iranian oilfields.

    A joint statement said India would import 7.5 million tonnes a year (tpy) of LNG starting 2009 and running for 25 years.

    “Every last detail has been settled, price too,” said Indian Oil Minister Mani Shankar Aiyar after talks with his Iranian counterpart, Bijan Zanganeh, on Friday.

    An Indian government official put the price tag of the deal at $40 billion although there was no official confirmation of the figure. The statement said India’s ONGC Videsh Ltd and the National Iranian Oil Company (NIOC) had agreed a preliminary deal for Indian firms to participate in the Yadavaran and Jufeyr oilfields through service contracts.

    Iran has been pursuing a series of LNG purchase agreements, which reward potential buyers with upstream participation in fields in OPEC’s second biggest oil producer. India’s participation in the Yadavaran field, estimated to hold 3 billion barrels of crude, will be 20 percent, or the equivalent of 60,000 barrels per day (bpd).

    “China will be the operator and India will have 20 percent,” Mr Zanganeh told reporters. India’s participation in the Jufeyr oilfield would yield about 30,000 bpd. Indian firms, led by ONGC Videsh, the overseas arm of state-run Oil and Natural Gas Corp, would take 100 percent of the Jufeyr project. Mr Zanagneh said the service contracts were identical to Iran’s long-standing buy-back agreements under which field developers recoup their investments with production from the project. Talks between India and Iran broke down in late November after a difference on the pricing of the LNG (natural gas super-cooled to liquid form for export on tankers).

    Friday’s agreement was signed after talks this week between Middle East oil producers and Asia’s biggest consumers — China, Japan, India and South Korea. New Delhi estimates that oil demand will rise by 4 percent this year compared with an increase of roughly 5 percent in 2004. The statement said that the LNG part of the deal was signed between gas transporter GAIL India Ltd., Indian Oil Corp Ltd. (IOC) and the National Iranian Gas Export Corp.

    It said that Iran’s Petropars and IOC planned to submit a joint proposal for development of an upstream block on the South Pars gas field and for a 9-million-tpy gas liquefaction plant by the end of February. reuters
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