Iran will export LPG to India for the first time, announced Iranian Gas Commercial Company (IGCC) in a statement.
IGCC, a subsidiary of National Iranian Gas Company (NIGC), signed a contract for one very large gas carrier (VLGC), or 44,000 tons, per month for an initial six months with an unnamed third party, argusmedia.com reported.
In the longer term, IGCC hopes to make a government-to-government deal with Indian Oil Corporation (IOC), said Amir-Reza Golchin, the IGCC's marketing and export director.
Golchin said payment for the time being is cash, in euro or in UAE dirham because of problems in 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 prior to the sanctions 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 one million tons per month, pushing it ahead of Japan and second only to China in world rankings of LPG importers.
Indian demand rose by 64 percent 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 one million tons per year to 3.8 million tons per year next year. During the sanctions era, 95 percent of Iran's LPG was exported to China.