OVL consortium plans $5 billion LNG project in Iran: report

A consortium of Indian companies comprising ONGC Videsh Ltd (OVL), Indian Oil Corporation and Oil India Ltd have proposed to invest around $5 billion in the Farzad oil and gas block they discovered in the Persian Gulf.

Iran had approved the commerciality of the Farsi block last year and OVL has submitted a development plan to the Iranian authorities.

The Farzad gas field is expected to hold in-place reserves of about 21.68 trillion cubic feet (tcf), of which recoverable reserves may be 12.8 tcf, Iran's Press TV reported.

The Indian companies plan to liquefy the gas and ship it to India in the form of liquefied natural gas (LNG) once a contract is signed and the consortium gets development rights for the field.

Iran hopes to produce 77 million tonnes of LNG a year by the year 2014. It, however, has so far not responded to the development plan.

If approved, the consortium will get the marketing rights for the gas produced at Farzad. The oil and gas will still belong to the National Iranian Oil Co (NIOC).