News ID: 139416
Published: 0706 GMT April 12, 2016

Iran reaches basic agreements with India on Farzad B

Iran reaches basic agreements with India on Farzad B

Tehran and Delhi reached preliminary agreements on developing Farzad B gas field during the recent visit by Indian Minister for State for Petroleum and Natural Resources Dharmendra Pradhan to the Islamic Republic.

Jafar Pourfarjoudi, spokesperson of Oil Ministry, told Trend News Agency that during the talks the two sides discussed a timetable for the project as well as the continuation of cooperation for the development of the gas field.

The initial agreement for exploration and the development of Farzad B gas field was signed with a consortium of three Indian state companies in 2000.

However, the contract only dealt with the exploration part and no measure was taken on the development of the field. It is estimated that the development of the project will cost about $5 billion.

"So far, the sides have only reached an agreement on cooperation and further talks are expected to discuss the details and the framework of the agreement in future," Pourfarjoudi said.

Pradhan paid an official visit to Tehran last week during which Tehran and New Delhi signed a document on cooperation on the development of Farzad B gas field.

According to estimates, Farzad B gas field contains over 350 billion cubic meters of natural gas and 212 million barrels of condensate.

Iranian Oil Minister Bijan Namdar Zanganeh announced that the contract for the development of Farzad B will be under sole source contract.

In 2008, a consortium led by India's ONGC Videsh discovered the Binaloud oilfield off the Farsi offshore block. The consortium is now keen to seal a contract for developing the gas field.

Over the past decade, Tehran held talks with New Delhi to export gas to India via  a pipeline crossing Pakistan territory but later India opted out of the project.

So far, the Indian side has proposed a $4.5 billion seabed pipeline to take Iran's gas to India. They have also put forward a project for the construction of an LNG production unit in Iran's southeastern port city of Chabahar.

Following the Indian delegation's recent visit to Tehran, media outlets suggested that New Delhi is keen to invest $20 billion in Chabahar. According to the media reports some parts of this is expected to be invested on the construction of a petrochemical factory as well as a LNG unit in Chabahar.

Pourfarjoudi had said that the issue of exporting gas to India was discussed in the recent talks. According to Pourfarjoudi, if India invests in Chabahar, the export of gas through sea-bed or LNG will be considered. However the sides have not agreed on the methods for exporting gas.

According to the official Iran also eyes purchasing refineries in India to guarantee its oil exports.



Petchem market


Meanwhile, a senior Iranian petrochemical official said India is a major market for Iran's petrochemical products given New Delhi's seven-percent economic growth.

Mehdi Sharifi Niknafs, managing director of Petrochemical Commercial Company, told Shana that the company participated in P4 Expo India during April 5-8, adding that India is seen as Iran's biggest market for petrochemical exports after China in the region.

He said Iran needs to be more careful about China as an export destination because the country has planned to launch major petrochemical and polymer projects on the one hand, and enjoys only five-percent economic growth, which is lower than that of India.

"Regarding India's faster development, the country can replace China as a major customer for Iran's petrochemical productions," he added.

Petrochemical consignments from Iran take 2 or 3 days to get to India while the period is up to 45 days to reach China, he added.

During P4 Expo, Iranian exhibitors presented their latest achievements in plastics and polymer industries, he said.

"The showcase was a good opportunity for marketing our petrochemical products in Asia and our stand sparked much interest among the fair's visitors," he said.

P4 Expo India offered a platform for both Indian and international companies to showcase their expertise, products, and technology innovations. P4 Expo brought together the entire value chain of petrochemical, plastics, packaging and printing industries under one roof and throw open the best networking opportunities for exhibitors and visitors alike.

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