The Hindu Business Line : British consultant to advise on natural gas price from Iran

Gaffney, Cline & Associates, UK-based consultants, have been appointed to advise on the natural gas price to be supplied to India and Pakistan from Iran through the proposed Iran-Pakistan-India (IPI) gas pipeline.

Last month, in order to break the impasse on the natural gas price, the three nations decided to appoint an international consultant.

Official sources told Business Line, the British consultant is expected to submit its report on gas pricing in October. "Once the report is validated by the technical group of the three countries, secretary-level talks will be held in November," the sources said.

A decision to appoint an international consultant was taken after the two-day Secretarial-level trilateral talks in August failed to create a breakthrough on the issue of gas price. While Iran wanted the price linked to crude oil, the buyers jointly sought a price band with a floor and ceiling. Indications are that Iran wanted a price equivalent to 10 per cent of ruling Brent crude oil price, plus a fixed cost of $ 1.2 per million British thermal unit. This, at an average Brent price during recent times of $60 per barrel, translated into a price of $7.2 per mBtu at Iran-Pakistan border. To this would be added the cost of transporting the gas through Pakistan. India was willing to pay $4.25 per mBtu for gas delivered through the 2,100-km line at its border.

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