The Hindu Business Line : Iran offers to sell LNG at $2.22

IRAN on Monday offered to sell liquefied natural gas (LNG) to India at $2.22 per million British Thermal Units (mmbtu). It also offered a 20-per cent stake in a discovered oil field in Iran.

According to the Iranian delegation, this is aimed at making good the difference between the higher LNG price and the lower domestic gas price of $1.58 per mmbtu. The Indian public sector undertakings have been seeking a mechanism whereby the Iranian gas can be sold at par with that of ONGC in the domestic market. While the Iranian are keen on selling gas, a commodity in oversupply in their country, the Indian are keen on extracting an oil and gas block from the Islamic nation.

The gas offered by Iran is cheaper than India's first LNG imports from Qatar. RasGas of Qatar is selling Petronet LNG Ltd 5 million tonnes per annum of LNG at a free-on-board (f.o.b) price of $2.53 per mmbtu.

The Iranian f.o.b price of $2.2 per mmbtu is still higher than the Indian quote of $1.72 per mmtbu, spelt out by the Indian delegation at the second meeting of the India-Iran Joint Working Group on cooperation in Hydrocarbon sector that began today. Discussions on the LNG pricing are expected to continue tomorrow.

Iran has offered equity in Husseinieh-Khush oil field and proposed to pay ONGC Videsh Ltd 15 per cent return on investment in developing the field.

According to a senior official, the 20-per cent equity offered in the oil field would yield 60,000 barrels per day of crude oil.

On the petrochemical sector side, Iran's National Petrochemical Company (NPC) today offered stake to Indian firms in its upcoming $10 billion petrochemical plant in southern Iran.

"We want investments in the 300,000 tonnes petrochemical plant being set up in Pars Special Energy Economic Zone. Indian companies can invest up to 50 per cent in the plant which will go on stream in 2009-2010," the NPC board member, Mr M.H. Rahbari, told newspersons.

Gas for the petrochemical plant will be sourced from the gigantic South Pars gas field that will also export five million tonnes of LNG to India.