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India signs up for Iranian LPG

28 Apr 2017 12:35 (+01:00 GMT)
India signs up for Iranian LPG

London, 28 April (Argus) — Iran will export LPG to India for the first time.

Iranian state-owned gas company NIGC's subisidiary IGCC has signed a contract for one very large gas carrier (VLGC), or 44,000t, per month for an initial six months with an unnamed third party.

In the longer term, IGCC hope to make a government-to-government deal with Indian state-owned IOC, said marketing and export director A R Golchin.

Golchin said payment for the time being is cash, in euro or UAE dirham, because of problems dealing in US dollars. Although some EU and US sanctions against Iran were lifted last year others remain in place. This is preventing IGCC from signing anything longer term for the time being.

Iran did not have a contract with India before sanctions were imposed because the demand was not there, but India's demand now exceeds its production by so much it needs new supply channels. Indian LPG imports now regularly breach 1mn t/month, pushing it ahead of Japan and second only to China in world rankings of LPG importers. Indian demand rose by 64pc year-on-year in March because of a government push to promote LPG over biomass as a cooking fuel.

Golchin said IGCC plans to raise LPG exports from around 1mn to 3.8mn t/y next year. During the sanctions era, 95pc of Iran's LPG was exported to China.