GAIL not keen on pact with Iranian companies

GAIL not keen on pact with Iranian companies

State-owned gas utility GAIL India is unwilling to sign any agreement with Iranian companies for sourcing of gas because of the fear of US sanctions, Oil Minister Dharmendra Pradhan said today.

GAIL had in 2005 signed an agreement with National Iranian Gas Export Corporation (NIGEC) for import of 7.5 million tons a year of gas in its liquid form (LNG) from Iran. It was also a signatory for receipt of gas via the proposed Iran-Pakistan-India (IPI) gas pipeline.

But after US imposed sanctions on Iran over its suspected nuclear programme, Indian firms are wary of entering into pacts which may lead to them being sanctioned by Washington.

“Since GAIL has substantial business interest in the US, GAIL is unwilling to sign any agreement involving an Iranian entity until a final position emerges with respect to Iran sanctions,” he said in a written reply to a question in the Lok Sabha.

Pradhan said South Asia Gas Enterprise (SAGE) is pursuing a deep-sea gas pipeline from Middle East to India for importing natural gas. It has entered into a Memorandum of Understanding with NIGEC for transportation of gas to India through deep water route.

“In the year 2011, GAIL was nominated by the Ministry (of Petroleum and Natural Gas) as the designated agency for the project,” he said.

“GAIL has reservations in signing of the non-binding framework agreement forwarded by SAGE in March 2013 with an Iranian company, since it could lead to impairment of GAIL’s access to international commercial or financial services and capital markets, in its global business ventures,” he said.

The state-owned firm has 20 per cent stake in Carrizo shale gas venture in the US where it has committed to invest USD 300 million. Also, it has multiple agreements for sourcing of gas and use of LNG terminals for shipping it to India.

The US Government Accountability Office (GAO) listed three Indian companies as having commercial activity in Iran’s energy sector, potentially attracting US sanctions.

State-owned Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and Indian Oil Corp ( IOC) have been on the list since 2010 for having stakes in Iran’s Farsi oil and gas field.

Under US sanctions against Tehran, companies doing energy business in with Iran face exclusion from the US financial system.

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