Iran, India relax stand on gas pricing

17 Nov 2006

1

Mumbai: India and Iran seems to be veering round to a common acceptable pricing formula for reviving an LNG deal struck last year. While Tehran has offered a new price lower than quoted earlier, New Delhi too says it is willing to raise its offer slightly for imported gas.

India had proposed to import 5-million tonnes of natural gas from 2009. But the two countries failed to make a deal after New Delhi rejected Tehran's demand for $5.10 per mbtu of gas as against the agreed price of $2.90 per mbtu.

"They have given us a new offer and now we will start working on that," petroleum minister Murli Deora said after a meeting with Iran's foreign minister Manouchehr Mottaki. He said the Iranian minister is of the view that the price offered by India is very low and that it must be re-negotiated.

"A little more price is okay but the new price should not be very high from what we had offered," Deora said.

"We are going to offer a new price. If it is accepted, the project would be implemented," said Mottaki adding that a deal would be beneficial for both as India wants gas for its developmental plans and Iran wants to earn revenues from gas exports.

"I am optimistic that with further negotiations with a specific formula, you will receive gas very soon," he said.

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