India Plans $20B Investment in Iranian Port

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By MarEx 2016-04-11 20:52:20

On Saturday, Iran's official oil and gas media outlet, Shana, announced that India intends to spend $20 billion on developing energy and petrochem projects at the port of Chabahar in southeastern Iran, the closest deepwater Iranian port to the subcontinent.  

The Indian minister of petroleum and natural gas, Dharmendra Pradhan, said after a meeting with Iranian Minister of Petroleum Bijan Zangeneh that "India is prepared to develop Chabahar Port.” Pradhan visited Tehran along with a group of Indian oil and gas firms to discuss cooperation with their Iranian counterparts. 

The announcement would dramatically increase the scale of planned Indian investment in Chabahar, and would add to a long legacy of involvement: India provided major support for the port's initial development in the early 2000s, intending to bypass Pakistan on logistics routes to Central Asia and to counter a Chinese port initiative at Gwadar. Chabahar is so important to India that it resumed construction at the port in 2012, despite international sanctions on Iran and objections from the United States. 

In late February, India reiterated a much more modest 2015 plan for capital investments of $85 million and annual revenue payments of $23 million, in exchange for a ten year lease on two berths at the port. After the lease's exipration, the berths' equipment will be transferred to Iran; operation is set to commence in late 2017. The February announcement included a provision for a $150 million credit line for the port's development. 

Shana also announced Saturday that Indian officials are considering an undersea pipeline to carry 11 billion cubic meters of Iranian natural gas to India, bypassing liquefaction and shipment by sea; an unnamed Indian firm is also said to be interested in resuming plans for joint development of the Farzad-B gas field, originally discovered by Indian oil company ONGC Videsh.