India likely to sign gas import deal with Iran in June

Mumbai: India is likely to finalise a $145-billion deal for import of natural gas from Iran through the proposed Iran-Pakistan-India pipeline by June this year. This follows a climb-down by Tehran, which agreed to lower sale price of piped gas by 30 per cent.

Pakistan also has agreed to the pricing formula giving a boost to the Iran-Pakistan-India (IPI) pipeline. Iranian oil minister Kazem Vaziri Hamaneh has said the three countries have reached an agreement on the final sale price of the gas to be transferred through IPI the pipeline.

India, Pakistan and Iran have held trilateral talks on the gas price and pricing formula proposed by the consulting company in charge in Tehran with participation of officials from India and Pakistan as well as representative of Iran's oil ministry, Iranian News Agency IRNA quoted the minister as saying.

Tehran, as a last-ditch attempt to salvage the project that would give the US sanction-hit country about $9.5 billion in revenue annually, has changed the price formula from 10 per cent of the ruling Brent crude oil price plus $1.2-per million British thermal units (MBTU) fixed cost to 6.3 per cent of the Japanese crude cocktail (JCC) plus $1.15 per MBTU.

According to the new price formula, at $60 per barrel of crude, the cost of gas at the Iran-Pakistan border would have translated into $4.93 per MBTU, against a gas price of $7.2 per MBTU at $60 per barrel of crude under the previous formulae.

Besides, India will pay another $1.5 per MBTU for piping gas through Pakistan and transit fee to Islamabad.

"The Peace Pipeline should also be discussed by Pakistan and India, given that it will cross through both countries," the minister said, adding, "the Indian officials said that the proposed gas price cannot be finalised, unless the issue is negotiated between India and Pakistan."