Iran seeking higher price for LNG supply to India

Aug 4, 2006, 16:46 GMT

New Delhi, Aug 4 (IANS) Iran Friday asked India to renegotiate the price of the 5.0-million-tonnes LNG bilateral deal signed last year, but New Delhi told Tehran that the higher price it was seeking was 'unrealistic'.

Iranian Deputy Oil Minister for International Affairs Mohammad-Hadi Nejad-Hosseinian discussed the LNG price issue with Petroleum Minister Murli Deora here Friday on the sidelines of the India, Pakistan, Iran meeting on the proposed multi-billion dollar tri-nation gas pipeline project.

Deora, however, told the Iranian delegation that no renegotiation is being thought of as India considers the $22 billion deal - to supply 5.0 million tonnes per annum of liquefied natural gas for 25 years beginning 2009-end - as final.

'Again pricing is the issue. The agreement you have signed you should stick to that. I don't think they are anywhere near the commitment,' Deora told the media.

'The (renegotiated) 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,' Deora said.

Deora said that during his meeting with the Iranian president at Shanghai earlier this year, the Indian stand had been conveyed. In turn, Deora was assured that the LNG supply commitment would be honoured.

Nejad-Hosseinian, however, told media Friday that 'there are legal differences and I do not know if the deal is effective or not'.

Petroleum ministry officials admitted that while India is not open to renegotiations on the 5.0 million tonnes deal, it would form part of the talks on the sidelines of the pipeline tripartite talks as the minutes of the two-day meeting, which concluded earlier in the day, are finalised.

© 2006 Indo-Asian News Service