Indian media have reported that the country’s state-run gas utility GAIL has begun talks with Iran to revive a decade-old LNG supply contract with the country.   

The Business Standard has reported that GAIL has opened talks with Iran over the LNG contract whose value is estimated to be $22 billion in light of the prospects for the removal of sanctions against Iran.

"Dialogue has been initiated with Iranian counterparts to revive the LNG supply long-term SPA," the Business Standard has quoted GAIL as announcing in its latest annual report.

In 2005, three Indian firms – namely GAIL, Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) – signed deals with the National Iranian Gas Export Company (NIGEC) for buying a total of 5 million tons a year of LNG from Iran.

The related price of the LNG – $3.215 per million British thermal unit (mbtu) – has been described by the Business Standard as “extremely attractive”.

"Iran has so far not responded to the offer," a GAIL official said. "There is a half-finished LNG export terminal in Iran which will have to be completed before any export of LNG can begin from Iran."

GAIL under its deal with NIGEC will buy 2 million tons per year of LNG while IOC and BPCL will each purchase 1.75 million tons and 1.25 million tons from Iran.

By Press TV