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| India to Develop Iran's Natural Gas Deposits |
| 2004-11-03 |
| By subscription only, so I give you the entire article. Iran has reached a preliminary agreement with India to develop a part of one of the world's largest natural-gas deposits, the latest in a string of energy deals that compound difficulties faced by Washington as it attempts to isolate Iran over its nuclear program. Under a memorandum of understanding signed Monday, state-owned Indian Oil Corp., the biggest oil refiner in India, will join with Iranian gas utility Petropars to bring to production one block of the offshore South Pars gas deposit, which accounts for 60% of Iran's gas reserves and 10% of the world's reserves. Iran has the world's second-largest gas reserves, after Russia. Details of the pact weren't disclosed. The Indian company, known as IOC, said the estimated total investment in the project could reach $3 billion. Energy analysts said Petropars, a subsidiary of National Iranian Oil Co., would likely take a majority stake in the venture. The project also includes the construction of a liquefaction plant in southern Iran to liquefy the gas for sea transport. IOC said it was too early to put a figure on its share of investment in the project. It noted that approvals are needed in both countries for the venture to proceed. Analysts said that, judging from past energy dealings with Iran, it could take could take as many as four years to produce gas from the zone allotted to IOC. The Indian company would get a fixed rate of return on its investment and probably would use that money to buy gas from the Iranian government at a negotiated price, they said. The deal shows how the search for alternatives to increasingly expensive crude oil is complicating Washington's security agenda. The U.S. has had sanctions against Iran for more than 20 years. More recently, it has spent much diplomatic effort urging allies to use any leverage they have to convince Tehran to abandon what the U.S. claims is an illicit nuclear-weapons program. Those efforts are running into roadblocks thrown up by the surging price of crude oil and the need for alternatives. Last week, China struck a preliminary deal with Iran with a potential value of tens of billions of dollars to develop an oil field in exchange for purchases of Iranian liquefied natural gas. Earlier this year, the U.S. failed to dissuade Japan from signing a roughly $3 billion contract that gives Tokyo the rights to develop Iran's Azadegan oil deposit. "The Europeans are also dealing with Iran," said Madhu Nainan, editor of Petrowatch, a New Delhi petroleum industry newsletter. "The Americans are the ones who are isolated, not the others." Although India's relations with the U.S. have been improving, New Delhi's acute energy insecurity is driving it to risk harming those ties by dealing with Iran. India, Asia's third-biggest consumer of energy, imports 70% of the crude oil it needs to run its economy, which expanded more than 8% in the year that ended March 31. The amount of natural gas available for sale in India amounts to 80 million cubic meters a day, say analysts, which meets only 70% of the country's demand. Analysts say Indian demand for natural gas will rise to more than 300 million cubic meters a day within 15 years, and most of that will need to come from imports. India is on a global hunt to meet its energy needs by buying stakes in foreign oil and gas fields. Its exploration utility, Oil & Natural Gas Corp., has struck agreements in countries including Sudan, Russia and Syria. If the IOC deal in Iran is completed, it will mark that company's first major energy venture outside India. |
| Posted by:trailing wife |