TEHRAN -- State-run Indian Oil Corporation (IOC) has teamed up with Iran's Petropars to put forward a $3bn joint project to develop a gas field in Iran, Petropars Director Gholam-Reza Manouchehri said.
He told PIN that IOC-Petropars Consortium will offer its final proposal in six months.
The proposal from India's biggest refiner would also see it set up a liquefaction plant in Iran. India is Asia's third largest oil user while Iran is the number two OPEC producer.
Manouchehri said the consortium is determined to make arrangements for daily production of 1.8 billion cubic feet (45 million cubic meters) of Liquefied Natural Gas (LNG) in South Pars.
"IOC and Petropars will define a joint project for upstream and downstream activities in order to produce and sell LNG. The upstream sector involves development of the Phase 1 of South Pars while the downstream sector is related to gas liquefaction plant and LNG production and export."
The official stated that Petropars would hold 60 percent of the upstream section of the buy-back project. He added that IOC would have 60 percent of the downstream activities.
"The expenses would be recouped through gas sales," Manouchehri said, adding that gas liquefaction plant would be constructed under a Build-Operate-Own (BOO) system.
"The Indian partner is committed to purchasing 4.5 million tons of LNG per annum for 25 years. It is willing to market 4.5 million tons too."
He said that the project would produce nine million tons per annum of LNG to earn the country nearly 3.5 billion dollars.
"The National Iranian Oil Company and the Indian company have separately reached agreement for production and export of 4.5 million tons of LNG," the official said.
The agreement was signed "for development of a joint proposal to be submitted to National Iranian Oil Co. for the proposed integrated project of development of the gas field and setting up of LNG liquefaction facilities".
A feasibility report into the proposed project will be carried out to see how much of the $3bn scheme would be paid for by IOC.
Indian state-run oil companies have been looking for investment opportunities in Iran to agree package deals which would also involve New Delhi buying Iranian liquefied natural gas (LNG).
India imports more than two-thirds of its crude oil requirement and output from its aging oilfields has declined in recent years.
India's Oil and Natural Gas Corporation (ONGC) plans to take a 55% stake from Canadian firm Antrim Energy in an offshore block in western Australia.
In the past few years ONGC has bought oil and gas assets in Angola, Iraq, Libya, Myanmar, Sudan, Syria and Vietnam.
Manouchehri turned to Iran-India gas pipeline project and said that obstacles have delayed it.
India says it would agree to the construction of Iran-India gas pipeline via Pakistan project if Islamabad purchases diesel from New Delhi.