Iran gives first offer of $6mBtu for gas

By agencies   |   Tuesday, 21 March 2006, 08:00 Hrs
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NEW DELHI: At a recent tri-nation high-level meeting between Iran-Pakistan-India (IPI) on the proposed pipeline project, Iran has given the first offer price for the gas in the range of $6 per million British thermal unit (mBtu).

According to senior Petroleum ministry official, "After 18 months of negotiations, Iran has given the first price offer for gas to be delivered at the Iran-Pakistan border. This is the first fix on the price. Now Pakistan and India will have to do their homework to negotiate for the final price.”

He said the next round of secretary-level talks on gas pricing and project structure would be held in Islamabad in the last week of April.

Asked whether the issue of transit fee was also discussed at the first secretary-level meeting held in Tehran from March 13-15, the official said this is a bilateral issue between India and Pakistan.

Referring to the first secretary-level trilateral meeting, the official said besides the gas price, the three countries dwelt on the project structure for the proposed multi-billion dollar pipeline.

The second trilateral secretary-level meeting slated in April is a departure from the earlier roadmap for talks decided in December.

Asked what has prompted this second round of secretarial meeting, he said that it has been thought suitable as there are several pending issues still to be resolved before the first trilateral ministerial meeting takes place when the project framework agreement is expected to be signed.

Earlier, at roundtable organized by the Confederation of Indian Industry (CII), the Petroleum Secretary, M S Srinivasan, said that from the highs of $12-13 mBtu, the spot price of gas being traded globally has softened to around $7-8 mBtu.

"For the long-term contracts, we expect the gas price to stabilize at around $4.5-5 mBtu," he said. In fact, the state-owned gas transmission firm GAIL (India) Ltd is going to pay $4.75 per mBtu for gas from the Panna, Mukta and Tapti fields owned by BG, ONGC and Reliance Industries.

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