Malaysia's Petronas had on Monday ceded its 20 per cent interest in the Pars LNG production company set up last year to build a $ 2 billion liquefaction facility in Iran.
"We discussed the issue on Tuesday and ONGC Videsh Ltd (the overseas arm of ONGC) is keen on the opportunity created by the exit of Petronas," a top official in the Ministry of Petroleum and Natural Gas said on Wednesday.
The project involved conversion of gas from Phase-11 of the giant South Pars offshore gas field into LNG. France's Total SA and Petronas hold 60 and 40 per cent in the partnership looking to develop block 11.
The two had also formed a production company Pars LNG, half owned by Iranian state oil firm National Iranian Oil Co, with Total holding a 30 per cent share, and Petronas 20 per cent.
While Petronas withdrew from the LNG production project as commercial terms did not meet its investment criteria, it was still committed to the development of gas in Block 11.
The official said OVL's interest was conveyed to National Iranian Gas Export Company's managing director R Javadi, who was in New Delhi to finalise export of 7.5 million tonnes of LNG from Phase-12 of South Pars field to India, beginning 2009.
Earlier Indian Oil Corporation had teamed up with PetroPars, a subsidiary of NIOC, for developing one of the 28 phases of South Pars field and producing 9 million tonnes per annum of LNG, at least half of which was for India.
India is currently negotiating three separate natural gas import projects with Iran. The first involves import of 7.5 million tonnes per annum of LNG under a government-to-government agreement for 25 years beginning 2009-10.
Separately, New Delhi is also pursuing import of up to 90 million standard cubic meter per day of natural gas from Iran through a 2600-km pipeline passing through Pakistan.
The third project involves IOC's partnership with PetroPars for development of one of the phases of South Pars field and producing LNG from it.
The official said under the US sanctions, Washington can take measures against companies that invest in Iran, which has almost a tenth of the world's oil reserves.
While US oil majors are absent from Iran, many European companies such as Royal Dutch/Shell and Total are engaged in projects there. But European oil major BP Plc had said it was impractical for the company to do business in Iran due to BP's large operations in the US.
Total in December concluded a framework deal with Iran, which allowed a decision to go ahead with the Pars LNG project by early 2006.
This agreement aimed to enable the start of engineering studies in 2005, which could have allowed a decision to launch the project at the end of 2005 or early 2006.
The project will initially involve building two units that will produce 5 million tonnes each of LNG a year.
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