BG International announced on September 26th that it has signed a joint-venture agreement with Iran’s Oil Industry and Energy Co. (OIEC) to transport Iran’s natural gas exports from the giant South Pars gas and condensate field to the Indian market.
BG signed a memorandum of understanding in July ahead of the agreement. The project is the largest joint-venture agreement with a foreign company since the Islamic Revolution in 1979 and is worth $1 billion, according to the Iran Daily.
Tehran holds the world’s second-largest gas reserves, with South Pars alone having an estimated 200 trillion cubic feet, but the reserves have been underutilized due to a lack of investment.
BG is considering two potential liquefied natural gas (LNG) export terminal sites at Asaluyeh and Kish Island, in southern Iran, and the company plans to develop an Indian import terminal at Pipavav, in Gujarat.
BG’s initial two-train project is expected to produce and export 6-7 million tones of LNG a year, starting in 2006, according to the company.
BG and several other international companies had earlier proposed a pipeline that would carry gas from South Pars to India via Pakistan, but the project has hit obstacles, namely political tensions between New Delhi and Islamabad.
( oilnavigator )