The Hindu Business Line : Iran wants to renegotiate 5-mt LNG deal with India

TALKING TIME: (From Left) Mr Ahmed Waqar, Petroleum Secretary, Pakistan; Mr Mohammad Hadi Nejad-Hosseinian, Deputy Oil Minister of Iran; Mr Murli Deora, Minister for Petroleum and Natural Gas; and Mr Dinsha Patel, the Minister of State, at a meeting on India-Iran-Pakistan pipeline in the Capital on Friday. - Kamal Narang

New Delhi , Aug. 4

It is not only the Iran-Pakistan-India gas pipeline project which is seeing some tough negotiations on the gas pricing, but the five-million-tonne liquefied natural gas (LNG) deal signed between Iran and India is also stuck on the price issue.

The Iranian Deputy Oil Minister for International Affairs, Mr M.H. Nejad-Hosseinian, on Friday conveyed to Petroleum Minister, Mr Murli Deora, the need to renegotiate the price of LNG. The Iranian team was here to participate in the trilateral meeting on Iran-Pakistan-India gas pipeline project. Mr Nejad-Hosseinian told newspersons that "there are legal differences and I do not know if the deal is effective or not."

Mr Deora, however, conveyed to the high-level delegation that no renegotiation is contemplated as India considers the $22-billion deal to supply five million tonnes per annum of LNG for 25 years beginning 2009 end as final.

Mr Deora said, "Again pricing is the issue. Iran has signed an agreement, it should stick to it. I don't think they (Iranians) are anywhere near the commitment. The price they are seeking is unrealistic. They are asking for more than double. If we accept, it would mean an additional implication of $12 billion."

The Minister stated that during his meeting with the Iranian President at Shanghai earlier this year, the Indian stand had been conveyed. In turn, he was assured that the LNG supply commitment would be honoured.

India in early 2005 entered into a contract with Iran to import five million tonnes of LNG with an option to buy an additional 2.5 million tonnes.

Iran in May informed New Delhi that the price agreed between them in June 2005 was not valid, as its Supreme Economic Council had not approved the prices at $3.25 per million British thermal units.

Iran on Friday indicated that global crude oil prices can still touch $100 per barrel mark. "There is still a possibility of crude reaching $100 (per barrel) due to geopolitical problems world wide and peaking of winter demand," Mr Nejad-Hosseinian said.

When asked if Iran would stop crude supplies to the global market in case US takes a military action over its nuclear programme, he said, "No, I don't think so."

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