$3b Farzad-B Gas Field Deal With India

$3b Farzad-B Gas Field Deal With India$3b Farzad-B Gas Field Deal With India

A consortium of Indian companies has reached an initial agreement with Iranian officials to develop Farzad-B gas field under a $3 billion contract, managing director of the Iranian Offshore Oil Company said in a statement.

"The first development phase of Farzad-B is expected to require $3 billion in [foreign] investment," Saeed Hafezi told Mehr News Agency on Sunday.

A consortium of OVL, Oil India and Indian Oil Corp. had discovered an estimated 363 million cubic meters of gas reserves in the Farsi block in 2008. The discovery was named Farzad-B.

But the Indians were forced to abandon the project after the US and the EU introduced tough sanctions against the Persian Gulf country.

Hafezi said a new round of negotiations is underway with Indian contractors on marketing or delivering Farzad-B natural gas to India. Gas output from the field can either be converted into liquefied natural gas and shipped to India or transported through a pipeline via Pakistan or subsea.

"We can close a deal with Indians if the two sides agree on a contractual model and the method of gas supply or marketing," Hafezi added.

The Wall Street Journal reported in September that ONGC Videsh Ltd, the overseas arm of India's state-owned Oil and Natural Gas Corp., had submitted a $10-billion proposal to Iran for developing Farzad-B and shipping its gas to India.

It is apparently a matter of time before Tehran and Delhi sign a final deal on Farzad-B project. Earlier this year, Oil Minister Bijan Namdar Zanganeh described Farzad-B as the only Iranian project "promised" to a foreign contractor.

As a further sign of interest in working with Indians in Farzad-B project, Iran did not list the gas field among the 52 oil and natural gas projects introduced to international companies in a major conference in Tehran last month.