India, Iran close to finalise gas deals

NEW DELHI—India and Iran said they were optimistic that two multi-billion-dollar deals for the supply of Iranian natural gas and the construction of a pipeline would be finalized soon.
Negotiations over the two agreements had been stalled over price differences, but New Delhi and Tehran said they were willing to renegotiate. “There is a serious will and flexibility on the part of the relevant officials as far as these projects are concerned,” Iran’s visiting Foreign Minister Manouchehr Mottaki told reporters in New Delhi.
“I am hopeful and somewhat confident that before the current year is over we will be able to finalize these two issues,” said Mottaki, who met India’s Petroleum Minister Murli Deora Friday during his two-day visit. Earlier Friday, Deora said New Delhi would consider Iran’s fresh price offer for the supply of five million tonnes of gas annually from the energy-rich Middle Eastern country.
“They have given us a new offer and now we will start working on that,” Deora said. “A little more price is okay but the new price should not be very high from what we had offered.” “With the new formula I am very hopeful that the deal would fructify.”
India is supposed to get five million tonnes of liquefied natural gas annually over a 25-year period from 2009 under a 22-billion-dollar-agreement signed in Tehran in June last year. But the deal has since hit a snag over pricing. Mottaki told reporters Thursday that the project would get the green light if New Delhi agreed to the fresh offer.
A seven-billion-dollar proposal to supply Iranian gas to India through a 2,600-kilometre (1,600-mile) pipeline via Pakistan has also hit an obstacle, with Tehran saying New Delhi and Islamabad were unwilling to pay the asking price. In August, India, Iran and Pakistan agreed to appoint a consultant to resolve the row over the pipeline.
“We are waiting for the final report of the consultants and will continue our negotiations both bilateral and trilateral to reach a common ground and implement the huge project,” Mottaki said. India’s Deora said top oil officials from the three countries will meet within a month in Tehran to review proposed prices. India needs gas for industry, vehicles and cooking fuel. Demand is estimated at 170 million cubic metres (222 million cubic yards) daily and is expected to rise to 400 million cubic metres a day by 2025 as India’s economy expands.
Domestic gas supply is currently 85 million cubic metres a day and imports are expected to make up the bulk of demand in the future. India imports 70 percent of its energy needs. Iran is confident deals to sell liquefied natural gas to India and build a pipeline linking Iranian gas fields with energy-hungry South Asia will both be agreed by the year’s end, its foreign minister said on Friday.
Manouchehr Mottaki and Oil Minister Murli Deora said after talks in New Delhi that the two countries were negotiating the price of LNG to be supplied by Tehran. “I am hopeful and somewhat confident that before the current year is over we will be able to finalise these two important projects,” Mottaki told a news conference. Deora said he too hoped the process would soon bear fruit.
Last year the National Iranian Gas Export Company said it would export liquefied natural gas to India for 25 years from the end of 2009, but the deal was subject to ratification by the Iranian government. The two countries have since been in dispute over the price India will pay for up to five million tonnes of LNG a year, and the haggling had become a stumbling block in attempts to build a pipeline to bring Iranian gas to Pakistan and India. Mottaki said after the meeting Iran was keen to press ahead with both the LNG deal and the gas pipeline.
“I am sure with further negotiations with a specific formula we will finalise the LNG imports from Iran to India,” he said. “Based on political will, India will receive gas very soon.” New Delhi accuses Tehran of seeking to increase the price tag, while Iran says the Indian offer is too low.—Agencies