Reuters : India and Iran said on Friday they were still negotiating the price of LNG to be supplied by Tehran but expressed confidence that a deal would be reached soon and that a pipeline linking Iran and South Asia would be built. By Hari Ramachandran
NEW DELHI (Reuters) – India and Iran said on Friday they were still negotiating the price of LNG to be supplied by Tehran but expressed confidence that a deal would be reached soon and that a pipeline linking Iran and South Asia would be built.
Last year the National Iranian Gas Export Company said it would export liquefied natural gas to energy-hungry India for 25 years from the end of 2009, but the deal was subject to ratification by the Iranian government.
The two nations have since been in dispute over the price India will pay for up to five million tonnes of LNG a year, and the haggling had become a stumbling block in attempts to build a pipeline to bring Iranian gas to Pakistan and India.
“India and Iran are renegotiating the LNG pricing,” Oil Minister Murli Deora told reporters after a meeting with the visiting Iranian Foreign Minister Manouchehr Mottaki.
Mottaki said Iran was keen to press ahead with both the LNG deal and the gas pipeline.
“I am sure with further negotiations with a specific formula we will finalise the LNG imports from Iran to India,” he said. “Based on political will India will receive gas very soon.”
New Delhi accuses Tehran of seeking to increase the price tag, while Iran says the Indian offer is too low.
Iran has the second-largest natural gas reserves in the world behind Russia — about 940 trillion cubic feet — while growing Asian economies, including India and Pakistan, are scrambling to find energy sources to feed industrial expansion.
Deora said Iran had submitted a proposal on the pricing of gas and India would get back to them. He was hopeful of fixing a price acceptable to both.
He said new proposals had been added to the contract signed in June 2005 in Tehran, and these were being reviewed.
“I cannot say when we will get LNG, but not very late.”
Separately, Mottaki and Deora said both sides were awaiting a report on the price to be paid for Iranian gas to be delivered through the proposed $7 billion pipeline.
India, Pakistan and Iran agreed last month to appoint an outside consultant to suggest a price for the pipeline gas. Iranian officials had offered a price linked to Dated Brent crude that equated to about $8 per million British thermal units (mmBtu), while New Delhi wants to pay about $4.25 per mmBtu.
Deora said the consultants were expected to submit their report soon and this would be followed by secretary level talks between the three countries in Tehran.
