The Hindu : International / India & World : India, Pakistan, Iran narrow down differences on gas price

Online edition of India's National Newspaper
Friday, Jan 26, 2007
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International

International - India & World

India, Pakistan, Iran narrow down differences on gas price

Atul Aneja

DUBAI : After two days of hectic parleys, representatives from India, Pakistan and Iran have narrowed down differences on the price of natural gas that Iran plans to sell to the two countries across a 2,700-km pipeline.

"There has been progress and the parties involved are expected to take a very positive view of the development," India's Ambassador to Iran Manbir Singh told The Hindu over telephone.

Mr. Singh pointed out that the consultants, Gaffney Cline and Associates, who had been appointed to formulate a price mechanism, had made a presentation at the conference. "Based on their recommendations, participants made detailed observations that could become the basis for calculations in the future."

According to the state-run Islamic Republic News Agency (IRNA), Iran had earlier proposed a price equivalent to 10 per cent of the price of Brent crude. In addition, a fixed cost of $1.20 per million British thermal units (mBtu) would be added to this figure. At $50 a barrel, this would translate into a price of $6.20 per mBtu at the Iran-Pakistan border. Transport costs beyond that point would be added to this price.

On the other hand, India had said that it did not wish to pay more than $4.25 per mBtu for the gas that would be delivered at its border.

Fresh momentum

The estimated cost of the venture is $7 billion. The trans-national pipeline would pass through 1,100 km of Iranian territory, 1,000 km of Pakistani territory and 500 km of Indian territory.

According to diplomatic sources, interaction between India and Iran has acquired a fresh momentum since the mid-November visit to New Delhi by Iranian Foreign Minister Manouchehr Mottaki. External Affairs Minister Pranab Mukherjee is now set to visit Iran on February 6. "There is an attempt to hold an India-Iran joint commission meeting during his visit. But, Mr. Mukherjee would visit Iran irrespective of the meeting," the sources observed.

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