New Delhi: India has sought land and cheap natural gas for investing about $20 billion in new petrochemical, fertilizer and liquefied natural gas (LNG) facilities in Iran, primarily for importing these commodities into India.

Oil minister Dharmendra Pradhan, who is in Iran with a delegation of state-owned and private sector companies to seek greater investment and trade opportunities, has held discussions with his counterpart Bijan Namdar Zanganeh; Akbar Torkan, senior adviser to the President of Iran on Free Trade Zones; and Iran’s central bank governor Valliolah Seif, a statement from the oil ministry said.

The proposed investments in fossil fuel-rich Iran’s Chabahar Special Economic Zone are part of an experiment New Delhi refers to as ‘reverse SEZ’. The plan involves setting up downstream industries in the soil of trade partners with energy sources. The idea is to secure these commodities at a globally competitive price without any disruption.

“Pradhan conveyed to the Iranian side that Indian companies could invest as much as $20 billion and were interested in setting up petrochemical and fertilizer plants, including in the Chabahar SEZ, either through joint ventures between Indian and Iranian public sector companies or with private sector partners,” said the statement.

Pradhan has also requested Iran to allocate adequate land in the SEZ and to supply gas at a “favourable and competitive price on long-term basis for these projects.” New Delhi is also keen to set up a gas cracker unit and a liquefied petroleum gas (LPG) extraction unit in Chabahar. Both the sides also discussed ways of transporting gas to India from Iran including through a proposed Iran-Pakistan-India pipeline, said the statement.

Tehran, which was India’s second largest crude oil supplier till 2010-11 and subsequently lost its share due to sanctions imposed by the US and the European Union, wants to increase its crude oil supplies to India. The country imports close to 12 million tonnes of oil from Iran a year, a government official said. India imported a total of 184 million tonnes of oil in the April-February period of 2015-16. Iran is currently the fifth largest oil supplier to India. Saudi Arabia, Iraq, Nigeria and Venezuela are the other leading suppliers.

Pradhan discussed with the governor of the Central Bank of Iran how to open up payment channels for paying dues to Tehran for the oil imported during the sanctions, which were lifted in January. India currently pays 45% of the import bill in rupees through UCO Bank. The remaining is to be paid in euros, for which a banking channel is to be established.

Pradhan is expected to travel to the United Arab Emirates in the second leg of his four-day tour that started on 9 April.