$25 bn Indo-Iran LNG deal today

Gail to market 40% of Iran gas, IOC 35%, BPCL 25%

India is likely to sign tomorrow a $25 billion deal with Iran for import of liquefied natural gas (LNG) beginning 2009-10 for meeting its growing energy requirements.

The gas sales and purchase agreement (GSPA) for at least 5 million tonnes per annum of LNG beginning second half of 2009-10 will be signed by a consortium of Indian firms and National Iranian Gas Export Company (NIGEC), officials said.

Of the 5 million tonnes per annum LNG to be imported from Iran, state-run gas utility Gail (India) Ltd will be responsible for marketing 40 per cent, Indian Oil Corp (IOC) 35 per cent and Bharat Petroleum Corp Ltd (BPCL) the remaining 25 per cent.

"We have been insisting on the LNG quantity be raised to 7.5 million tonnes we have to wait for the outcome of my talks with Iranian Oil Minister Bijan Zanganeh," Petroleum Minister Mani Shankar Aiyar said.

Iran has refused to give concession on price for an additional 2.5 million tones of LNG New Delhi wants to buy over and above the 5 million tonnes per annum of LNG already agreed. On the contrary, Iranian side has proposed a hike in price. However, Iran has agreed to maintain c2 (ethane) component in the LNG at 5 per cent.

Aiyar said a GSPA for at least 5 million tonnes per annum of LNG would be signed on June 13 and if Iran agrees the quantities can be raised to 7.5 million tonnes or else discussions would continue for additional supplies.