Panel to fix price of piped gas from Iran

Mumbai: India, Pakistan and Iran will jointly set up a committee of experts to go into the pricing of natural gas that Iran proposes to sell to New Delhi and Islamabad through a $7 billion pipeline connecting the two buyers.

"Three members from each side have been drafted into a committee to look into the pricing issue. They will submit their report tomorrow morning," petroleum secretary M S Srinivasan told reporters after a meeting of officials of the three countries.

He said there was a 60 per cent difference between the price proposed by Iran and what India and Pakistan were willing to offer. While India suggested a price of $4.25 per mbtu at its own border, Islamabad wanted Tehran to offer a price in line with international practices for long-term contract.

He said Iran proposed a formula linked to prices of Brent crude, in which the price of gas is arrived at by adding 0.1 per cent of Brent price to a fixed cost of $1.2 per million British thermal unit. As per this formula, the price of natural gas at Iran-Pakistan border comes to be $7.2 dollars per mbtu, considering a $60 a barrel price for Brent.

India had indicated a requirement of 90 million standard cubic meters of gas per day to be imported from Iran through the 2,100-km pipeline, while Pakistan has indicated a requirement of up to 60 mmscmd.