Indian Wants to Revive LNG Import Talks With Iran

India has expressed interest in buying LNG from Iran.

“With the lifting of sanctions, Iran is again planning LNG liquefaction facilities. An Indian delegation visited Iran during last week of July, 2015, wherein Indian side indicated their willingness to off take LNG from Iran,” India petroleum minister Dharmendra Pradhan informed the Rajya Sabha, the lowe house of the parliament Wednesday.

Indian state owned energy firms GAIL, Indian Oil Corp & BPCL signed bilateral Sale & Purchase Agreement (SPA) with National Iranian Gas Export Company (NIGEC), Iran on 13th June 2005 for import of 5 MMTPA of LNG. Quantities required by the buyers were as follows: GAIL was to import 2 MMTP, IOCL – 1.75 MMTPA and BCPL – 1.25 MMTPA.

The contract price for LNG was linked to Brent crude with a floor and cap of $10/bbl and $31/bbl respectively.

According to the side letter signed along with the contract, NIGEC was required to obtain approval of National Iranian Oil Company (NIOC) for the LNG SPA within 15 days. However, NIGEC neither secured this approval nor implemented the LNG SPA.

 Iran is now attempting to revive its LNG industry. Recently, Total’s Patrick Pouyanne told Russia’s Kommersant that the company is looking to work on LNG and oil projects in Iran. Tehran has also invited Japanese companies to invest in country’s LNG sector.