Indo-Iran LNG deal hits hurdle

According to ministry sources, Iran had stuck to an ‘‘astonishingly’’ high price for LNG. India has been pushing for a fixed-term/fixed-price contract similar to a deal it has with Qatar, but Iran wanted LNG prices to be indexed against Brent crude oil price. ‘‘At current crude oil prices, LNG will cost us over $4 per Million British Thermal Unit (MBTU) as compared with Qatar LNG price of $2.53 per MBTU. With such high prices, Iran is a closed chapter for us,’’ sources added.

India is now talking to Yemen and Qatar for sourcing 10 million tonnes of LNG. Petronet LNG is importing 5 million tonnes of the gas from Qatar at its Dahej terminal in Gujarat.

Another 2.5 million tonne has been contracted from Qatar for delivery in 2008-09. Apart from the 7.5 million tonne, India is also talking to Qatar for another 5 million tonne.

Tehran was to give India 20 per cent share in the development of its biggest onshore oil field, Yadavaran, as part of its plans to sell 5 million tonnes of LNG.

It was also offering Indian firms a stake in the Jofeir oil field if India purchased an additional 2.5 million tonnes annually.