Foreign Correspondence

[Amaunet]

India and Iran sign $40b LNG deal

The United States has already lost leverage to China with the signing of a mega-gas deal between Beijing and Tehran worth $100 billion. Billed as the "deal of century" by various commentators, this agreement is likely to increase by another $50 billion to $100 billion, bringing the total close to $200 billion, when a similar oil agreement, currently being negotiated, is inked not too far from now.

U.S. efforts to rein in Iran's nuclear weapons program through economic sanctions are being stymied by China's increasing reliance on the Islamic nation for oil.
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Iran in signing a $40b LNG deal with India has just bought another powerful ally in addition to China.

Another consequence might be India’s rejection of the US Navy's presence in the northern Indian Ocean region and a negative response to Rumsfeld’s concept of a new Asian peacekeeping force.

-Am

India and Iran sign $40b LNG deal

* Delhi will import 7.5m tonnes LNG a year starting 2009 and running for 25 years

NEW DELHI: India has signed a $40 billion deal with Iran to import liquefied natural gas and join in developing three Iranian oilfields.

A joint statement said India would import 7.5 million tonnes a year (tpy) of LNG starting 2009 and running for 25 years.

“Every last detail has been settled, price too,” said Indian Oil Minister Mani Shankar Aiyar after talks with his Iranian counterpart, Bijan Zanganeh, on Friday.

An Indian government official put the price tag of the deal at $40 billion although there was no official confirmation of the figure. The statement said India’s ONGC Videsh Ltd and the National Iranian Oil Company (NIOC) had agreed a preliminary deal for Indian firms to participate in the Yadavaran and Jufeyr oilfields through service contracts.

Iran has been pursuing a series of LNG purchase agreements, which reward potential buyers with upstream participation in fields in OPEC’s second biggest oil producer. India’s participation in the Yadavaran field, estimated to hold 3 billion barrels of crude, will be 20 percent, or the equivalent of 60,000 barrels per day (bpd).

“China will be the operator and India will have 20 percent,” Mr Zanganeh told reporters. India’s participation in the Jufeyr oilfield would yield about 30,000 bpd. Indian firms, led by ONGC Videsh, the overseas arm of state-run Oil and Natural Gas Corp, would take 100 percent of the Jufeyr project. Mr Zanagneh said the service contracts were identical to Iran’s long-standing buy-back agreements under which field developers recoup their investments with production from the project. Talks between India and Iran broke down in late November after a difference on the pricing of the LNG (natural gas super-cooled to liquid form for export on tankers).

Friday’s agreement was signed after talks this week between Middle East oil producers and Asia’s biggest consumers — China, Japan, India and South Korea. New Delhi estimates that oil demand will rise by 4 percent this year compared with an increase of roughly 5 percent in 2004. The statement said that the LNG part of the deal was signed between gas transporter GAIL India Ltd., Indian Oil Corp Ltd. (IOC) and the National Iranian Gas Export Corp.

It said that Iran’s Petropars and IOC planned to submit a joint proposal for development of an upstream block on the South Pars gas field and for a 9-million-tpy gas liquefaction plant by the end of February. reuters

http://www.dailytimes.com.pk/default.asp?page=story_8-1-2005_pg1_6




Reference:
Lieutenant-General Singh may find that India's improving relationship with the United States could lead to acceptance of the US Navy's presence in the northern Indian Ocean region.

Reports indicate that during US Defense Secretary Donald Rumsfeld's visit to India this month, he unfolded a new matrix for Asian security. This allegedly involves setting up a new Asian peacekeeping force, including India, Japan, Australia, Singapore, Pakistan, moderate Middle East regimes, and so on. Rumsfeld's core idea is to thin down the US military, modernize it even more, and involve Asian and Australian-Asian armies in their own security, equipped where necessary with US weapons. This way, key US interests will be protected; its hegemony will remain intact.
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