Iran offers LNG at Brent prices

Iran has offered to sell 7.5 million tonnes of liquefied natural gas (LNG) to India at a price linked to Brent crude oil and doled out one more oil field to Indian firms to make New Delhi accept the LNG price of over $4 per million British thermal unit at current crude prices.

At current Brent crude oil price of over $45 a barrel, Iranian LNG would cost $4.125 per MBTU, over 60 per cent higher than $2.53 per MBTU price that New Delhi is paying Qatar to buy a similar quantity.

The formula offered by Iran links the LNG price to movement in brent crude oil price. Iranian LNG would equal the Qatari price only when Brent price falls to $20 a barrel. ‘‘The Indian side did not agree to such a high price,’’ a top oil industry official said.