A senior Iranian official said on Monday that negotiations are being held to build a $4.5 billion undersea gas pipeline from Iran to Indian west coast following India’s rejection of the proposal for an onland pipeline that would pass through Pakistan.

“Negotiations are under serious consideration,” said National Iranian Gas Export Company managing director Alireza Kameli at the World Energy Policy Summit here.

The planned pipeline from the Iranian coast via the Oman Sea and Indian Ocean to Gujarat is proposed to carry 31.5 million standard cubic metres gas per day and will be built in two years, from the date necessary approvals and a gas sale and purchase agreement are signed, he said.

“We welcome India’s participation. At the moment, Iran is in negotiations with South Asia Gas Enterprise (SAGE) for construction of an undersea line,” he said.

As per the proposal being discussed, SAGE will lay the 1,400 km pipeline bypassing the exclusive economic zone (EEZ) of Pakistan. Any company wanting to buy gas from Iran can rent the pipeline.

“SAGE will not be buying gas from Iran. It will lead an international consortium for building the pipeline,” said Subhodh Kumar Jain, director of the New Delhi-based SAGE.

“SBI Caps is advising us on the project,” he added.

India has not taken part in the talks on the 1,036 km Iran-Pakistan-India gas pipeline since 2007, citing security and commercial concerns.

Meanwhile, the Teheran-based Mehr news agency has reported that Iran has agreed to award a $3 billion contract to develop the Farzad B gas field in the Persian Gulf to a consortium of Indian companies led by state-run Oil and Natural Gas Corp (ONGC).

Mehr quoted the director of the Falat Ghare oil company, Saeed Hafezi, as saying the easing of sanctions after Iran’s nuclear deal with world powers, signified that the consortium can resume field development, the first phase of which aims to produce one billion cubic feet of natural gas per day.

The Farzad B field, successfully discovered by the Indian explorer’s overseas arm ONGC Videsh Ltd (OVL), is estimated to hold initial in-place gas reserves of 12.5 trillion cubic feet.

ONGC officials here, contacted by s on Monday, declined knowledge of the latest developments, but said a proposal submitted by the consortium had cited around $3 billion as costs for the first phase of development of the Farzad B field.