Reliance, Petronas to set up Iran LNG plant
By Amitav Ranjan
May 18, 2000, NEW DELHI, May 18 (Reuters) - India's Reliance and Malaysia's
Petronas have signed an agreement with the National Iranian Oil Co (NIOC)
to set up a 7.5 million tonnes per year liquefied natural gas (LNG) plant
in Iran, Indian industry sources said on Thursday.
"Last week, Reliance signed a memorandum of understanding with
NIOC for setting up a 7.5 million tonne LNG plant in Iran ," an industry
official told Reuters.
State-run oil and gas company Petronas had also signed the same MoU
with NIOC, he said.
Petronas, Reliance and NIOC will each hold 25 percent equity in the
$3.5 billion project. "The fourth partner is yet to be decided,"
A Reliance spokesman declined to comment while Petronas and NIOC officials
could not be immediately reached on Thursday.
The agreement has blocked a planned integrated gas project by Indian
Oil Corp (IOC) and Oil and Natural Gas Corp (ONGC) in Iran for LNG supplies
to India, said an ONGC official, who did not want to be identified.
The project, jointly pursued by IOC and ONGC, included developing gas
fields in Iran 's South Pars field and setting up a liquefaction plant.
"What is now left of the project is the upstream sector - exploration
and development of the blocks - but this is not attractive," said
the ONGC official, who is aware of the Reliance-Petronas-NIOC tie-up.
"We are still hopeful that they will give the remaining 25 percent
equity to us (IOC-ONGC combine)," he added.
The IOC-ONGC proposal was a 50:50 joint venture between the Indian and
the Iranian firm, he said, adding that a draft of the shareholders agreement
had recently been sent for NIOC's approval.
Oil explorer ONGC, and refining and marketing firm IOC are equity promoters
of India's Petronet LNG Ltd which plans to import LNG, regassify and sell
natural gas in the country.
An oil company official said Petronas and Reliance have agreed to buy
about 2.5 million tonnes of LNG each year from the project which will source
gas for liquefaction from South Pars.
Petronas has an agreement to supply up to 2.6 million tonnes of LNG
to Enron India's 740-megawatt (MW) Dabhol project, whose capacity is to
be raised by another 1,624 MW in 2001.
Reliance has government approval to set up a LNG import and regasification
terminal at Jamnagar and Hazira in the western Gujarat state. Each would
handle 5.0 million tonnes of LNG a year.
Reliance, which has a refinery and petrochemical complex at Jamnagar,
is one of the bidders for setting up a 2,000 MW power project at Pipavav,
which is also located in the western Indian state of Gujarat.