MANAMA: India has signed an $18-billion gas deal that cements its special ties with Iran and opens up the possibility of establishing a foothold in the Persian Gulf oil and gas reserves.

India will buy five million tonnes of Iranian gas annually for 25 years. The supplies will begin in 2009. The deal was signed in the presence of the visiting Petroleum Minister, Mani Shankar Aiyar, and his Iranian counterpart, Bijan Zanganeh.

The agreement is part of a package, in which Indian companies will be allowed to participate in developing two oilfields and one gasfield in Iran.

Diplomatic sources told The Hindu that India's ONGC Videsh Ltd would get exclusive rights over the Juffeir oilfield, which has a capacity to produce 30,000 barrels a day.

India would also participate in the development of the Yadavaran oilfield. India's share in the Yadarvan — Iran's largest on-shore oilfield — was however reduced to 30,000 barrels a day. But it could be doubled if negotiations over the annual sale of an additional 2.5 million tonnes of gas to India succeeded.

The agreement cements a three-way Asian energy tie-up involving Iran, India and China.

China's state-run oil company Sinopec is operating the Yadavaran field, with a 50 per cent shareholding, along with Iran, which has a 30 per cent stake.

Supplies to begin in 2009

Role for Indian firms

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