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Iran tells India: Can’t lower gas price

New Delhi wants to pay for the gas only when it is delivered at the Pakistan-India border so that Tehran is roped in to ensure its safe passage through Pakistan.

Written by Amitav Ranjan | New Delhi |
March 5, 2011 1:22:42 am

Tehran has rejected New Delhi’s pre-conditions for joining the Iran-Pakistan-India natural gas pipeline and has indicated that the volume reserved for India could be diverted to the Persian Gulf.

Iranian Petroleum Minister Masoud Mir Kazemi told a government delegation from India that Tehran would not budge on gas pricing formula or its delivery point — two concerns on which New Delhi had sought his “indulgence and magnanimity” to break the impasse.

“The pricing of gas follows a fundamental formula and the price at which Iran buys gas from Turkmenistan and also sells to Turkey and Pakistan could form the base of pricing,” the discussion records quote Kazemi as saying. India’s decision to join the pipeline should be based on that special formula,he added.

At the meeting held last December,India said it expects the gas price to be around $4.2 per mBtu — same as Reliance gas from KG D6 field. But Iran’s revised pricing formula of 2009 pegs it at $8.3 per mBtu each time crude oil touches $60 per barrel.

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Iran had originally priced its gas at $3.2 per mBtu but in 2007 revised the rates to $4.93 per mBtu at $60 a barrel with revision every three years instead of the previously agreed seven. Tehran also washed its hands of from promising secured gas delivery up to the Indian border saying that the “subject of gas transfer depended on India,as it did with Pakistan”.

New Delhi wants to pay for the gas only when it is delivered at the Pakistan-India border so that Tehran is roped in to ensure its safe passage through Pakistan.

But Tehran wants to hand it over at Iran-Pakistan border under a trilateral pact whereby it would get paid even though supplies are disrupted in Pakistan. Expressing Iran’s inability to accept India’s riders,the minister thrice emphasized that the gas was much in demand.

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“He requested that India expedite its decisions so that Iran could decide on such (surplus) allocation,” the minutes of the meeting quoted Kazemi. “Iran had no problem even if India decided that it is not participating in the IPI pipeline as Iran had huge demands,especially from the Persian Gulf,” it quoted the minister.

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First published on: 05-03-2011 at 01:22:42 am

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