IOC to give Gail 10% stake in Iran plant

Indian Oil Corp (IOC) will give Gail a 10% stake in the liquefaction plant it plans to set up in Iran for export of LNG produced from the gigantic South Pars gas field.

IOC, along with Iranian firm Petropars, will develop one of the 28 phases of the field, convert gas into liquid form at the liquefaction plant, and ship LNG to India and other countries.

"Gail will be given 10% stake in the liquefaction plant in lieu of its offtake of one-third of 9 million tonne of LNG planned to be produced from 2008-09," an IOC official said today.

IOC will hold 40% stake in the development of the gas field with the remaining being with operator Petropars. In the liquefication plant, IOC, which was to hold 60% stake, will now see its holding drop to 50% after divesting 10% in favour of Gail.

This follows Gail CMD Proshanto Banerjee lodging a protest with the ministry of petroleum over IOC going solo in the project.

IOC and Petropars will submit a plan to develop Phase-12 of the South Pars field to National Iranian Oil Company (NIOC) by February 28.

Petropars is a subsidiary of NIOC, which owns the 500 sq mile South Pars field that is estimated to hold 436 trillion cubic feet of gas reserves.