India’s state-run gas utility GAIL has begun talks with Iran to revive a decade-old LNG supply contract with the country, reports PTI.
The Business Standard has reported that GAIL has opened talks with Iran over the LNG contract whose value is estimated to be $22 billion in light of the prospects for the removal of sanctions against Iran.
"Dialogue has been initiated with Iranian counterparts to revive the LNG supply long-term SPA," the Business Standard has quoted GAIL as announcing in its latest annual report.
GAIL, Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) has signed a Sale and Purchase Agreement (SPA) with National Iranian Gas Export Company (NIGEC) for buying a total of 5 million tons a year of LNG from Iran in 2005 but the deal was not finalized.
But Tehran never honored the deal. With prospects of sanctions against Iran being lifted after a historic nuclear accord it stuck with the US and other world powers, India has reopened dialogue on buying LNG from the Persian Gulf nation.
The move comes amid historic nuclear deal with the US and other world powers which resulted in end of decade old sanctions. As per the 2005 agreement, GAIL will buy 2 mt per annum of LNG from Iranian firm while refiner Indian Oil Corpo
ration had signed for 1.75 mt and Bharat Petroleum Corp Ltd (BPCL) was to take another 1.25 mt.