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India offers to invest $11b, but wants an 18% return.

India is prepared to invest a huge $11 billion in Iranian gas development, but wants a huge 18 percent return on its investment to be guaranteed.

An Indian consortium says it is willing to spend as much as $11 billion to develop a giant Iranian natural gasfield and build Iran's first plant for liquefying natural gas, a long-time Iranian goal--as long as the Islamic Republic guarantees a "reasonable return" on the project, according to the company leading the group.

Iran has long been dilly-dallying on the contract for the Farzad-B gasfield, which was discovered more than a decade ago by an Indian firm. India's feels that should give it first dibs on the field and is furious that Iran has started talking to Russia's Gazprom.

ONGC Videsh Ltd. has offered to invest as much as $6 billion on the Farzad-B field and spend another $5 to build a liquefied natural gas export facility, according to Narendra Kumar Verma, managing director of the overseas investment unit of India's largest explorer, Oil & Natural Gas Corp. The group is seeking a substantial return of about 18 percent; but Indian companies are willing to buy all the gas exported from the project, Verma said.

"We have given our best offer to them. Now, it is up to them to agree or not agree," Verma told Bloomberg News in an interview. "We have told the Iranian authorities very clearly that some basic returns are necessary."

It isn't known if the 18 percent demand offends Iran. The Iranian government has been exceedingly uncommunicative about the gasfield talks. But it is clearly not sufficiently impressed by the Indian offer to sign yet on the dotted line.

Iran has long sought the facilities to make liquefied natural gas (LNG), the only form in which natural gas be exported over long distances that are uneconomical to reach by pipeline. But sanctions kept it from getting access to the technology for years.

India is the world's fourth-largest LNG buyer. It is seeking to lock up gas resources to meet growing demand and spur the use of cleaner-burning fuels.

The two countries had aimed to conclude a deal on Farzad-B by last February. The Indian consortium has been trying to secure development rights to the Farzad-B field since at least 2009.

India, which bought Iranian crude even during the years of US-led sanctions, has now cut oil purchases to express its irritation over the delays on Farzad-B and Iran's flirtation with Gazprom.

ONGC Videsh and Indian Oil Corp. each own a 40 percent interest in the Farsi block that holds the Farzad-B field, while Oil India Ltd. has the other 20 percent.

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Title Annotation:Economy: Money and its impact
Publication:Iran Times International (Washington, DC)
Geographic Code:7IRAN
Date:Jul 7, 2017
Words:441
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