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Saturday, Jun 30, 2007
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Petroleum Government - Foreign Relations Gas pipeline hitch: Iran wants 3-year review of price formula
Roadblock: The Minister for Petroleum and Natural Gas, Mr Murli Deora, flanked by Pakistan’s Secretary, Ministry of Petroleum and Natural Resources, Mr Ahmad Waqar (right), and Iran’s Special Representative and Oil Minister, Mr Ghanimi Fard, during a meeting in the Capital on Friday. —
Our Bureau New Delhi, June 29 Critical talks on flow of gas from Iran to India through Pakistan seem to have run into a rough patch on Iran’s insistence for a revision of agreed pricing formula every three years. India and Pakistan, the two buyers, are of the view that the revision should take place in keeping with the international trend for long-term contracts. According to sources in the tri-nation talks going on here, the buyers were not too happy with Iran’s proposal. There are indications that another round of three-nation official-level talks could be held after a ministerial-level meeting between India and Pakistan on resolving transit fee issue. This could also mean that the final pact on the $7.4-billion gas pipeline project could be delayed. The final pact was to be originally signed in June, but was delayed till July and might get pushed beyond that now. Sources said that the buyers had agreed on the price formula proposed by Iran, according to which gas would be priced at $4.93 per million British thermal unit (mBtu) and the formula would be reviewed as per the international practices. But, Iran now wants the formula to be reviewed every three years. However, what is being taken as Iran’s commitment to the pipeline project is its announcement today said that gas supply from the giant South Pars fields through the proposed Iran-Pakistan-India pipeline could start from 2011. The ongoing talks did manage to reach a consensus on some of the major issues such as gas delivery point, gas availability and principles of calculating transportation fee, while issues including governing laws and the changes sought by Iran for revision of agreed pricing formula every three years were still being deliberated upon among the buyers and the seller. To finalise the remaining bilateral issues between India and Pakistan, the Petroleum Minister, Mr Murli Deora, will meet his Pakistani counterpart in July. Iran has invited the Prime Minister, Dr Manmohan Singh, and Pakistan’s President, Mr Pervez Musharraf, to Tehran for signing a tri-nation deal on natural gas, the Special Representative of Iranian Petroleum Minister, Mr Ghanimi Fard, told newspersons after meeting Mr Deora. Speaking to newspersons, Mr Deora said most of the major issues in the project had been resolved and only small things remain. The Petroleum Secretary, Mr M.S. Srinivasan, said that India and Pakistan have reached an agreement on the principle of calculating the tariff to be paid to Islamabad for transporting gas through pipeline segment in that country. However, the transit fee payable to Pakistan for allowing its territory to be used for passage of the pipeline is yet to be resolved. The issue would be discussed at the ministerial level.
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