TEHRAN: New Delhi is comfortable with the price of gas, at $4.93 per million British thermal units (mmBtu), offered by Tehran under the proposed Iran-Pakistan-India pipeline project. India believes that it now has to negotiate with Pakistan transfer and transit charges to make the pipeline viable.

After much negotiation, India and Iran, diplomatic sources told The Hindu , came to an understanding on the price, which is being seen as realistic.

The recent visits to Tehran by Petroleum Minister Murli Deora and External Affairs Minister Pranab Mukherjee laid the ground for faster movement on the pipeline, the sources said.

Both countries seem inclined to put behind them the anti-Tehran votes cast by New Delhi at the International Atomic Energy Agency in 2005 and 2006.

Officials close to the negotiations maintained that Iran was keen on clinching an early agreement on the pipeline, suggesting to India that it wanted an end-2007 deadline for concluding the talks among the three parties.

LNG project "off" However, progress on the five-million-tonnes-a-year liquefied natural gas contract, signed by India and Iran in June 2005, appears less certain, with objections being raised to the deal in the Majlis(Parliament).

Iran, soon after India voted against it at the IAEA in September 2005, made known that the $21-billion LNG contract was "off." As of now, there has been no change in that position.

There are clear indications that Iran, Pakistan and India are looking at involving the cash-rich Russian gas giant, Gazprom, in the pipeline project. In case relations between Iran and the United States deteriorate further and the sanctions regime is reinforced, a non-Western company like Gazprom will have obvious advantages.

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