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ONGC Videsh looking to invest in Iran

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Bloomberg are reporting that an Indian consortium is willing to spend as much as US$11 billion to develop an Iranian natural gas field and build the infrastructure to export the fuel as long as Iran guarantees a reasonable return on the project.

ONGC Videsh Ltd. has offered to invest as much as US$6 billion on the Farzad-B field and spend the remaining amount to build a LNG export facility. The group is seeking a return of about 18%, and Indian companies are willing to buy all the gas exported from the project.

As India seeks to lock up gas resources to meet growing demand and spur the use of cleaner-burning fuels, Iran is emerging from sanctions that stifled investment in its energy sector.

The two countries had aimed to conclude a deal by February on developing the field, which India has said holds reserves of almost 19 trillion ft3. The consortium, which includes Indian Oil Corp. and Oil India Ltd., has been trying to secure development rights to the Farzad-B gas field since at least 2009.

India is promoting the cleaner-burning fuel to curb the use of more polluting alternatives such as coal and petroleum coke to meet its pledge of slashing emissions by a third by 2030.

ONGC Videsh and Indian Oil each own 40% interest in the Farsi block that holds Farzad-B field, while Oil India has 20%.

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