India Relying on Iranian Gas to Woo Neighbors

© REUTERS / Raheb Homavandi/TIMAIranian workers walk at a unit of South Pars Gas field in Asalouyeh Seaport, north of Persian Gulf, Iran November 19, 2015
Iranian workers walk at a unit of South Pars Gas field in Asalouyeh Seaport, north of Persian Gulf, Iran November 19, 2015 - Sputnik International
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India eyes big big LPG market in neighboring countries using imports from Iran.

Indian Foreign Minister Sushma Swaraj (R) looks towards Iran's Foreign Minister Javad Zarif as they greet each other ahead of a meeting in New Delhi - Sputnik International
India Delighted Given VIP Status in Iran's Farzad B Gas Field Project
New Delhi (Sputnik) India is relying heavily on Iran’s LPG (Liquefied Petroleum Gas) to lend a new aspect to its friendly relations with neighboring countries like Bangladesh, Sri Lanka and Nepal. Indian Petroleum and Natural Gas Minister, Dharmendra Pradhan told Sputnik, “India is planning to expand its LPG network to neighboring countries also. We are in discussion with Bangladesh to set up an LPG terminal at Chittagong port and in collaboration with Bangladesh Petroleum Corporation; India can establish its market base in Bangladesh. Sri Lanka too expects LPG supplies from India for fulfilling the requirements of its people.”

There has been a recent understanding between Indian Oil Corporation Ltd, a government-run national oil company, and the Bangladesh Petroleum Corporation to examine the possibility of jointly setting up a LPG import terminal on the coastal belt of Bangladesh's Chittagong district, marketing LPG in Bangladesh's domestic market as well as developing related infrastructure in Bangladesh.

According to Petroleum Minister Dharmendra Pradhan, after calculating the total requirement of Indian consumers and the demand in neighboring countries, India's LPG requirement could rise to 30 million metric tons in the coming years. “After the lifting of economic sanctions, there is a big scope for us to imported LPG from Iran.”

Earlier this month, a statement released after Pradhan’s visit to Iran said, “India has expressed an interest in importing LPG from Iran. Companies from both sides could discuss on jointly setting up a extraction plant in Chabahar, if required.”

Gas refinery at the South Pars gas field on the northern coast of Persian Gulf in Asalouyeh, Iran - Sputnik International
India Eyes Liquid Gas Exports From Iran – Energy Minister

Currently, India has a consumption capacity of 21 million metric tons of LPG. Out of this, India has indigenous production capacity of 60% and 40% is imported. If demands from Bangladesh and Sri Lanka are added, consumption capacity could rise to 30 million metric tons.

"Importing LPG from Iran is much cheaper for India than producing it at home. Therefore, in the next 5-7 years, India will import more."

There is immense demand for LPG in Bangladesh, where only 15% of the population has access to LPG. This figure is only 10% and 21% in Sri Lanka and Nepal respectively. India and China are vying to capture these markets as LPG is a basic need for every household in these countries. This will be commercially beneficial but will also prove a major tool for swaying public sentiments in the favor of the supplier country.

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