Union oil and petroleum minister Ram Naik will travel to Tehran to discuss the prospect of importing liquefied natural gas and to boost bilateral cooperation in the energy sector.

"The Iranians have invited me, and I will go. We propose to sign a memorandum of understanding for cooperation in several areas including consultancy in the use of compressed natural gas for automobiles," Naik told Reuters on Sunday.

Naik said he had held discussions with Iranian officials accompanying President Mohammad Khatami, the guest of honour at the Republic Day celebrations on Sunday. Naik did not say when he would visit Iran.

Details of importing LNG would be discussed by state-run GAIL India Ltd, the country's largest gas marketing firm, and companies selling gas in Iran, Naik said.

"We need LNG, but how much and at what price is a commercial matter between GAIL and the Iranian companies."

Oil ministry officials said Iran was willing to involve state-run Indian firms in its upstream sector to enhance cooperation between the two countries.

Naik said India had ruled out the possibility of building an on-land pipeline for importing natural gas from Iran as it would have to pass through Pakistan, with which India has fought three wars.

"We have told them the land route is not acceptable. The work on studying a deep-sea route is progressing on schedule."

Energy-deficit India plans to import five million tonnes of LNG from Qatar and is seeking piped gas from Bangladesh, its eastern neighbour.

India produces 65 million cubic metres of gas a day, less than half its demand of 151 million cubic metres. It imports 70 per cent of the crude oil for its 17 refineries that can process 2.3 million barrels per day.