The Oil and Natural Gas Corporation, the country's largest oil exploration company, and the UK-based Hinduja group are lining up investment of close to $20 billion (around Rs 80,000 crore) in exploration assets in Iran and a refinery and LNG terminal in India.

Senior officials in ONGC's [Get Quote] overseas investment arm ONGC Videsh (OVL) and the Hinduja group held two rounds of discussions with Iranian officials in New Delhi.

"We are in negotiations," said Subir Raha, executive vice-chairman of the Hinduja group.

He added that if the negotiations are successful, the total investment from the exploration fields in Iran right down to marketing of gas in India would work out to around $20 billion.

Of the $20 billion, around $10 billion will be invested in upstream assets in Iran, a country in which Indian companies have interest in just one asset -- the Farsi block where both oil and gas have been discovered by OVL, Oil India and Indian Oil Corporation [Get Quote].

Studies to establish commercial viability of the reserves in the block are currently being carried out.

The OVL-Hinduja combine is eyeing the gigantic South Pars field in Iran, the country with the world's second largest gas reserves.

Gas from the South Pars field was also to feed the proposed $7.2 billion pipeline from Iran to India through Pakistan.

The consortium, which had also signed a memorandum of understanding in late 2006 for collaboration in the oil and gas sector, is also keen to develop the Azadegan oilfield in Iran, which is projected to hold over 40 billion barrels of oil.

The consortium is expected to get over 50 per cent in Phase 12 of the South Pars field, which could produce as much as 12 million tonnes of gas per year.

"We also want at least 50 per cent in the Azadegan field," a senior ONGC official said.

The gas from the South Pars field will be liquefied in a terminal in Iran, and shipped to India.

The combine plans to set up LNG regassification terminal at Mangalore on the west coast of India to receive the gas, and then distribute it.

A 5 million tonne a year (mtpa) LNG regassification terminal is already being planned by ONGC and its subsidiary Mangalore Refinery and Petrochemical Ltd in Mangalore.

The Hinduja group is also expected to pick up a stake in ONGC's proposed 15 mtpa crude oil refinery at Kakinada in Andhra Pradesh. The financial feasibility study for the refinery is underway and a final report is expected in the next couple of weeks.

An ONGC official said a stake in the Rs 25,000 crore (around $6.25 billion) refinery was likely to be offered to an Iranian company but declined to give the name of the company.

ONGC officials has previously said that the refinery was not financially feasible since another 7.5 mtpa Hindustan Petroleum Corporation-operated refinery exists at Vishakapatnam, which is near Kakinada.

Another 15 mtpa refinery is likely to be set up alongside the existing refinery in Vishakapatnam.

Although the Kakinada refinery is being planned as an export-oriented one, analysts said the export potential from a refinery on the east coast was not very high as the markets in India's east are already fed by the Singapore refineries.