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Besides oil imports, US sanctions hit India plan to develop Iran natural gas field


The US sanctions have not only affected India’s oil imports from Iran, but also impacted New Delhi’s plans to develop one of Iran’s gas fields. Tehran told New Delhi in January this year that it would develop the Farzad-B Gas field on its own. It has, however, kept the door open for India to join later.

Ministry of External Affairs spokesperson Anurag Srivastava said in a briefing on Thursday, “In January 2020, we were informed that in the immediate future, Iran would develop the field on its own and would like to involve India appropriately at a later stage. This matter remains under discussion.”

He said the Farzad-B Gas field negotiations were underway in which ONGC was involved in the discovery stage. “Follow-up bilateral cooperation was however impacted by policy changes on the Iranian side,” he said.

The Iranian natural gas field was opened in 2008 and New Delhi had been negotiating the rights to oil and gas from the field till the US sanctions on Iran jeopardised India’s plans.

On the Chabahar Port and Chabahar-Zahidan railway project, the MEA spokesperson said, “With regard to the Port, you are all aware that a longstanding commitment from 2003 was finally operationalised in 2016 during the Prime Minister’s visit to Iran. Since then, despite the difficulties posed by the sanctions situation, there has been significant progress on the Port project. An Indian company has been operating the Port since 2018 and has steadily scaled up the traffic at the Port.”

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“Insofar as the proposed railway line is concerned, IRCON was appointed by Government of India to assess the feasibility of the project. It was working with CDTIC, an Iranian company under their Ministry of Railways in that regard. IRCON has completed the site inspection and review of the feasibility report. Detailed discussions were thereafter held on other relevant aspects of the project… The Iranian side was to nominate an authorised entity to finalise outstanding technical and financial issues. This is still awaited,” he said.

Iran started work on the railway project last week since it wants to complete a section before Iranian President Hassan Rouhani faces elections next year.

India is not part of this project as of now since there is lack of clarity on whether it will attract the US sanctions.

While the port development has been exempted from the sanctions, sources said there is ambiguity over the railway link. As India talks to the US and awaits clarity, it has conveyed to Iran that it is open to joining the project later once the geopolitical situation becomes clearer possibly by the end of the year when the US elections take place.

Sources pointed out that India had allocated Rs 100 crore for the Chabahar project in this year’s Budget.