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BG teams with Iran firm to develop energy projects

By Mehrdad Balali

TEHRAN, Aug 3 (Reuters) - Britain's BG Group has signed an MOU with an Iranian company to jointly develop oil and gas projects in Iran, BG's local representative said on Thursday.

Ramin Lakani told Reuters that liquefied natural gas exports to India were at the centre of talks for future cooperation with the Oil Industry and Engineering Company (OIEC).

OIEC is an offshoot of the National Iranian Oil Company and is owned mainly by NIOC's present or retired employees.

He said the LNG project would require 50 to 100 percent of the gas produced from one of the development phases of Iran's giant South Pars gas field in the Gulf, but he did not identify which phase would be involved.

``We hope something will happen in 18 months,'' Lakani said.

Iran has awarded or is ready to award contracts to develop eight phases of South Pars, including a $3.8 billion deal for phases four and five given to Italy's ENI and Iran's Petropars last Thursday.

The latter will produce a million tonnes a year of liquefied petroleum gas for export, along with two million cubic feet a day of natural gas.

BG was one of the contenders for the project as part of a consortium, which also includes Royal Dutch/Shell, Gaz de France and Malaysia's Petronas.

Lakani said his company was chasing other oil and gas projects under the so-called buy-back basis.

``We hope our cooperation with OIEC is a first step towards achieving projects in Iran,'' he said. ``We are interested in helping Iran to find market and export its gas.''

Iran has the world's second largest gas reserves, but they largely remain untapped for lack of investment. At present, Iran is unable to free up any big volume of gas for exports.

BG and a number of other international firms have proposed to build a pipeline to carry South Pars natural gas to India via Pakistan.

But that prtoject faces a number of hurdles, mainly political tensions between New Delhi and Islamabad.

``The export of LNG to India is more practical for Iran. It is something over which it has greater control and can export wherever it likes,'' Lakani said.


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