India to consider Iran's new LNG pricing formula

India will consider a new offer on the pricing of liquefied natural gas (LNG) made by Iran as a precursor to reviving the deal for importing five million tonnes of the fuel from 2009.

"They have given us a new offer and we will start working on that," Petroleum Minister Murli Deora told reporters after an hour-long meeting with Iran's Foreign Minister Manouchehr Mottaki here on Friday.

According to Mr. Deora, the Iranian Minister indicated that the earlier price offered by India was very low and needed to be renegotiated. A price slightly higher than the one quoted originally by Indiawas acceptable, but it could not be much higher than the formula.

Mr. Mottaki said the deal would fructify with the new formula. He also expressed optimism that with further negotiations based on a specific formula it would be possible to supply gas to India. The two countries complemented each other as India needed gas for its developmental plans and Iran needed to earn revenues from gas exports.

Mr. Deora said the next round of talks on the LNG deal would be held "very soon." India might ask for raising the volume of imports from the original level of 7.5 million tonnes, of which price was negotiated for five million tonnes last year. The increase in volume, however, would be taken up only after the deal was finalised.

Secretary-level talks

On the proposed Iran-Pakistan-India gas pipeline project, he said the next trilateral Secretary-level talks would be held in Tehran next month to review the pricing issue. Mr. Mottaki said the final report of the consultants was awaited, while both bilateral and trilateral negotiations would continue to reach common ground and implement the huge project.

The pipeline project is stalled over the issue of gas pricing as Iran proposed rates higher than those originally envisaged by India. The decision to appoint an international consultant was taken after a trilateral meeting in August failed to reach an agreement. Asked about Russia's interest in taking an equity stake in the gas pipeline project, Mr. Deora said the Iranian Minister had sought time to communicate his country's stand.

Source: The Hindu, New Delhi
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