Reuters: A senior Iranian oil ministry official said on Friday that Iran, India and Pakistan have agreed over a price formula for Iran’s gas to be delivered via a proposed $7-billion pipeline, state radio reported. TEHRAN (Reuters) – A senior Iranian oil ministry official said on Friday that Iran, India and Pakistan have agreed over a price formula for Iran’s gas to be delivered via a proposed $7-billion pipeline, state radio reported.
The trilateral talks have been under way in Tehran since Wednesday aimed at reaching a consensus over the terms of the contract, the most important of which seemed to be the price, but had failed until late Thursday night.
In August, Iran offered a price linked to Brent crude oil that equated to about $8 per million British thermal units (mmBtu), while New Delhi wanted to pay about $4.25 per mmBtu.
“We have finally reached an agreement over the price formula,” Hojatollah Ghanimifard, deputy oil minister and the head of Iran’s negotiating team, told state radio.
UK-based consultant Gaffney Cline & Associates was appointed by the three countries in September after they failed to agree on a rate acceptable to all. But India and Pakistan rejected the consultant’s suggested price in November.
“The three delegations will now take the results to their governments for further discussions,” Ghanimifard said, adding that the governments had one month to announce their final decision on the agreement.
He did not elaborate on the details of the formula or the price range that was agreed upon, but expressed hope that the remaining measures regarding the natural gas pipe line would be taken by the end of June, if all of the problems were solved.
Iran has the second-largest natural gas reserves in the world behind Russia — about 940 trillion cubic feet — but it has been slow to develop exports.
Growing Asian economies, including India and Pakistan, are scrambling to find energy sources to feed industrial expansion.
The pipeline has been on the drawing board for years but has been held up by hostility between the South Asian nations and more recently by U.S. opposition to Iran’s nuclear programme.