IOC Likely To Defer Iran Investment Plans

New Delhi: Indian Oil Corporation''s (IOC''s) proposed $5.7-billion investment to establish an integrated LNG project in Iran is slated to be shelved with the validity of the 2004 agreement ending in October. IOC had inked a memorandum with Petropars of Iran in 2004 for developing a gas field, establishing a facility to liquefy the gas and building a terminal for exporting liquefied natural gas (LNG). The deal expires on October 31 with Tehran choosing not to respond to the Indian firm''s proposal. IOC-Petropars had made a pre-proposal to obtain in-principle approval from National Iranian Oil Company (NIOC) for allocating blocks in one of the phases in the gigantic South Pars field and for setting up liquefaction facilities.

NIOC, however, said since the South Pars field had already been allocated, it will analyze the possibility of allocating block to IOC-Petropars from the North Pars field. For the due diligence of the North Pars field, IOC-Petropars was required to ink a confidentiality agreement with Pars Oil and Gas Company (POGC). IOC sent reminders and in June asked a meeting of the chief executives of NIOC and IOC, but Iran did not respond to any of the requests. IOC needed around 12 trillion cubic feet gas for its 9 million tonnes per annum LNG project. The project comprised five parts, including a $2.2-billion upstream field development that was to be done via a joint venture between IOC and Petropars. The second stage of the LNG project entailed establishing a $1.8 billion liquefaction facility by another IOC-Petropars JV with 60 per cent IOC share and an investment of Rs 1,500 crore by the Indian refinery major.

Source : www.indian-commodity.com