The petroleum ministry is likely to allow GAIL India a stake in the gas liquefaction plant to be set up by Indian Oil Corporation and Petropars in the South Pars region of Iran.
This follows a protest letter from GAIL that IOC should not be allowed to go alone in the South Pars gas project in Iran since under a decision taken by the joint working committe with that country a consortium approach had to be adopted.
Senior ministry officials said the final contract was yet to be materialised but the government might allow GAIL in gas liquefaction project since it had expertise in this area.
"GAIL will have a large shelf of projects in the next few years including restarting of Dabhol project and the Assam gas cracker. Besides, the Indian side of work on the Indo-Iran and Indo-Mayanmar pipelines will also go to it whenever they come up," said a source.
IOC had last month signed a memorandum of understanding with Petropas for preparing a joint proposal for development of one of the 12 phases of South Pars field and setting up of gas liquification facilities. Petropas is jointly owned by state-owned National Iranian Oil Company and Industrial Development and Renovation Organisation Pension Fund.
Under the MoU, IOC will have 40 per cent share in the upstream development and 60 per cent in the liquefaction facility. A senior IOC executive sid that since the MoU has been signed between the two companies participation by any third company (GAIL) may not be welcomed by Petropas.
"Besides, it is not in the interest of the country since we will be sending confusing signals," said the executive.
The liquefaction facility will have two trains for converting gas into liquid which will then be transported to India.
The deal when it comes through will translate into 9 million tonne per annum (MTPA) oil equivalent gas for IOC.
The total investment is estimated to be $4-4.5 billion. This could translate into around $1 billion investment by IOC on a debt-equity ratio of 1:1.
