After Rail, India Set to Lose Iran Gas Project

After being “dropped” from a key rail project in southeastern Iran along the border with Afghanistan, India is also set to lose an ambitious gas field project in the country that had been in the pipeline for past 10 years.

India’s Ministry of External Affairs in a statement on Thursday said Tehran would develop the Farzad-B gas field in the Persian Gulf region “on its own” and might engage India “appropriately at a later stage”.

Last week, Masoud Karbasian, managing director of National Iranian Oil Company (NIOC), told reporters that a new operator had been roped in to develop the gas field, replacing India’s ONGC.

The huge field of natural gas reserve was discovered in 2008 by a consortium of three Indian companies — ONGC, Oil India Limited and Indian Oil Corporation.

According to the deal, the Indian side was supposed to develop the field but they abruptly stopped work in 2012, following the intensification of sanctions against Iran.

After sanctions were eased in 2015 following the signing of a nuclear deal between Iran and Western countries, India showed its willingness to return to the project.

However, things again fell apart amid the reinstatement of US sanctions on Iran in May 2018, which further “discouraged” India from making headway in the project, said sources familiar with the issue who requested not to be named.

“By May 2018, the two sides had made tremendous progress and agreed on key details of the project,” the sources said. “However, the US sanctions played the spoilsport.”

Double blow

India’s loss of the project marks a “big setback” for relations between the two countries, Tehran-based analysts, who asked to remain anonymous, told Anadolu Agency, as the Farzad-B gas field and Chabahar port were the two largest bilateral accomplishments between the two sides.

Earlier reports claimed that Iran had “dropped” India from a rail project after the Indian side showed reluctance to start work due to US sanctions.

The MoU to construct a 628-kilometre railway line from the port city of Chabahar to Zahedan was first discussed between the two sides in May 2016.

It came on the sidelines of the signing of a trilateral agreement between India, Iran and Afghanistan to develop a transport and trade corridor from India to Afghanistan through the Chabahar port in southeast Iran. The port has been operational since 2016 and has been exempted from US sanctions.

Iran and China is said to be finalizing a 25-year strategic partnership deal worth $400 billion which will include the rail project, sources say.

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