This winter Iran was forced to buy diesel from as far afield as Singapore after Reliance stopped supplies when its bankers refused to confirm letter of credit raised by Iran’s central bank, the result of increasing Western pressure over Tehran’s nuclear programme.
U.S. officials have also opposed moves to build a natural gas pipeline from Iran to India via Pakistan, but analysts say, MRPL’s sale of diesel to Iran was not likely to face U.S. opposition.
“We have a long-standing relationship with Iran. We have been processing their crude right from the begining and we are open to a long-term product supply agreement with them depending on the availability and pricing,” Rajamani said.
The 30,000 tonne cargo of 0.5 percent sulphur diesel is scheduled to load at New Mangalore Port in the last week of April, Rajamani said but did not give pricing details.
Earlier, sources told Reuters MRPL was hoping to secure a long-term deal to sell more fuel to OPEC’s second-biggest oil producer, which is forced to import motor fuels due to a lack of production from its aging refineries.
“NIOC (National Iranian Oil Co) will finalise the strategy for the whole year whether to buy additional volume for a year from MRPL after this cargo,” a senior industry source told Reuters.
“Formal talks on an annual deal may begin after the first parcel.”
One source said MRPL would be able to sidestep the payment problems that Reliance faced by settling its deals through the government-run State Bank of India.
The source, however, added that MRPL’s crude sourcing deal and product exports deal will be two separate contracts. MRPL annually imports around 120,000 bpd crude from Iran.
MRPL runs a 194,000 barrels-per-day coastal refinery in the southern Indian state of Karnataka.
Reliance, which operates one of the world’s biggest refineries, had used foreign banks like BNP Paribas and Calyon to guarantee counterparty credit on its deals.
