The government may set up another liquefied natural gas import terminal on the western coast to receive the 5 million tonnes of gas it is planning to purchase from Iran.

Though details of the project are yet to be worked out, the location of the import terminal is considered a foregone conclusion since Iran is located on the western side of the country.

In case it materialises, this will be the fourth LNG initiative on the western coast, after the Dahej project of Petronet LNG Ltd, the Dabhol project of Enron Ltd and the Hazira project of Royal Dutch Shell group.

India and Iran have agreed to formulate a package for importing 5 million tonnes of LNG in phases from Iran and participating interests for the Indian public sector undertakings like ONGC Videsh Ltd in discovered and semi-discovered oil and gas fields in Iran.

This emerged after a three-day discussion in Tehran during the first meeting of the India-Iran Joint Working Group on hydrocarbon sector. The minutes of the meeting were signed yesterday in the presence of Petroleum Minister Ram Naik and Deputy Oil Minister of Iran, Seyed Mohamad Hosainain.

The LNG project will be for 25 years. The details of the agreement will be discussed later to arrive at a mutually beneficial formula. Discussions in this respect would be completed within six months, an official press release said.

The gas sale purchase agreement will be signed within nine months of the signing of the agreement and the project will be implemented in the next four years. "The co-operation in LNG import and participation in discovered fields will be developed into a package jointly," the release said.

The minutes also envisage participation of GAIL in development of a compressed natural gas network in Tehran.

Iran will also make use of Indian expertise in modernising its refineries.

A term-contract for import of 5 million tonnes of crude from Iran was also signed in Tehran. "This marks another milestone in India's policy to have imports of crude preferably through term agreements," the release said.