Iran agrees major deal to export LNG to India

Iran on Monday agreed a major deal to export liquefied natural gas (LNG) to India, the latest sign of growing ties between energy-hungry Asia and Iran, holder of the world's second biggest gas reserves. Rokneddin Javadi, head of the state's National Iranian Gas Export Company, said his firm would export LNG to India for 25 years from the end of 2009, when Iran's exports of the supercooled gas are due to hit world markets.
He said exports would start at four million tonnes per year and then build up to five million tonnes over the first year of the contract.
Iranian Oil Minister Bijan Zanganeh said, at current market prices, the deal was worth $22 billion.
Iran is courting Asia's booming economies and signed a $70 billion 30-year LNG export deal with China's Sinopec last year.
Senior Iranian state oil official Mehdi Hosseini said India and Iran needed each other.
"It is a fast growing market, and we are a fast growing producer," he told Reuters.
"These markets are target markets for us, India and China," he added.
Iranian officials said the Indian partners in the deal would be the state-run Indian Oil Corp, GAIL, and Bharat Petroleum Corp, also state firms.
The deal fell 2.5 million tonnes short of an original 7.5 million tonnes that India had sought but an Indian oil official said discussions were still continuing for the extra tonnage.
"I think that it is in everybody's interest that we stick to the timeframe indicated in the original Memorandum of Understanding and come to a conclusion on this additional 2.5 million tonnes," Indian Petroleum and Gas Minister Mani Shankar Aiyar told reporters.
The Memorandum of Understanding was signed in New Delhi on January 7.
India also hopes to take advantage of improving relations with Pakistan to pump gas overland from Iran by 2012.
India's purchase of LNG would be linked to upstream stakes for ONGC Videsh Ltd, the overseas arm of India's Oil and Natural Gas Corp, in large Iranian crude fields.
If the LNG deal goes through, India would operate 20 percent of the giant Yadavaran field in south-west Iran, estimated to hold about three billion barrels.
It would also drill the Jufeyr oilfield, that is targeted to yield some 30,000 barrels per day.