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| Syria-Lebanon-Iran | |
| India hopes to get contracted 5 mt LNG from Iran | |
| 2006-02-05 | |
With the UN referral issue creating uncertainty about India's future relations with Iran, the Petroleum Ministry is fairly assured of the supply of five-million-ton contracted liquefied natural gas (LNG) from Iran. Putting to rest speculations that the $20-billion LNG deal with Iran may be in trouble, a senior Petroleum Ministry official said the 5 mt per annum LNG deal was legally binding, and that there was no need to address it afresh. The ongoing negotiations with Iran are for the additional 2.5 mt per annum, which India wants to buy, the official told Business Line. He clarified that the issue of pricing for the contracted 5 mt LNG was not discussed during the recent high-level meeting between the two countries in Tehran. While the Ministry feels that the contracted gas deal would come through, there is realization that the negotiations for additional 2.5 mt per annum would be tough, not just because of the way India finally votes on the referral issue but also because the new Government in Iran has some new ideas about gas exports. As regards the delay in ratification of the contracted 5 mt from the economic commission of Iran, the official said there was a delay, but it was mainly due to internal discussions in that country. Since LNG supply is scheduled from the second-half of 2009-10, there is no cause of immediate concern, he said. The LNG supply is also linked to ONGC Videsh Ltd getting 10 per cent interest in the development of the onshore Yadavaran oilfield and 100 per cent in the 30,000 barrels per day Juffair field. Pricing issue: Recently, there were reports that Iran had sought an increase in the price, not only for the additional 2.5 mt per annum but also for the contracted 5 mt. These reports said that after having signed a Sale Purchase Agreement (SPA) last June to export five-mt per annum of LNG at a price linked to $31 per barrel crude, the National Iranian Gas Export Company (NIGEC) had now informed India that the price agreed to was no longer valid. Three separate SPAs were signed in June 2005 between NIGEC and GAIL (India) Ltd, Indian Oil Corporation and Bharat Petroleum Corporation for export of five-mt of LNG. An agreement for an additional 2.5 mt could not be reached due to the higher price being sought by NIGEC than what was agreed for the 5 mt. | |
| Posted by:lotp |