A consortium of Indian companies plans to spend around $5 billion to develop an offshore gasfield in Iran and ship the liquefied natural gas (LNG) to India, it emerged on Friday.

State-run Oil and Natural Gas Corporation's (ONGC) overseas unit ONGC Videsh, Indian Oil Corporation and state-owned Oil India plan to develop the Farzad field in the Gulf, according to an Indian source quoted by Iranian news channel Press TV.

"The oil and gas will belong to the National Iranian Oil Company (NIOC)... They have the marketing rights and we have requested them to allocate the gas to us for converting it into LNG," the source said, adding that Iran had not responded to the plan submitted this month.

The Indian companies would liquefy the gas and ship it to India if a contract is signed and the consortium gets development rights, said a report in our sister publication, the Gulf Daily News.

Major European firms Total and Royal Dutch Shell have delayed or scrapped plans for multi-billion-dollar natural gas export projects in Iran, which is under UN and US sanctions over its disputed nuclear work.

Iran, the world's fourth-largest crude producer, sits on the world's second-largest gas reserves after Russia but US sanctions hindering access to technology have slowed development of gas exports.

Iran has not yet exported any LNG but says it will be able to produce 77 million tonnes a year by 2014.

The Farzad gasfield forms part of the Farsi block in the Gulf.

In November last year, a senior source at an Indian company holding a stake in the block said Iran had approved the commercial viability of natural gas production at the Farsi block operated by Indian firms.

ONGC and Indian Oil each hold a 40 per cent interest in the block, while Oil India has the rest of the block, estimated to hold recoverable gas reserves of 12.8 trillion cubic feet.

Iran is drawing interest from Indian and Chinese firms keen to tap the world's second-largest reserves of oil and gas and are less susceptible than many other companies to Western pressure over Tehran's nuclear programme. - TradeArabia News Service