NEW DELHI, 24 January 2007 — India, Iran and Pakistan will hold two-day secretary-level talks in Tehran starting today to discuss the price of gas to be supplied through a proposed $7 billion Iran-Pakistan-India (IPI) gas pipeline. “We have to first decide on the price of gas. Other issues such as who will build the project and how it will be built and maintained can be negotiated later,” a top Indian official said yesterday.
On India and Pakistan having earlier rejected the price proposed by Iran, he said: “There is a wide gap between the prices Iran as the seller and India and Pakistan as purchasers have proposed. The Tehran meeting will look at resolving the differences.” Failure to reach a trilateral consensus on price has so far been the main obstacle in getting the IPI project off the ground. Iran considers the offer of India and Pakistan too low. After the talks failed in August, the three countries appointed a UK-based consultant to assess the price. The report prepared by the consultant is expected to serve as a guide the trilateral discussions.
Anil Razdan, special secretary in the Ministry of Petroleum and Natural Gas, will lead the Indian side at the talks. Hojatollah Ghanimifard, director at the National Iranian Oil Company (NIOC) for international affairs, will head the Iranian negotiating group, while Ahmed Waqar, petroleum and natural resources secretary, would lead the Pakistani delegation.
Tehran last year proposed a price equivalent to 10 percent of the Brent crude oil price, plus a fixed cost of $1.20 per million British thermal unit (mBtu). This amounted to a price of $6.2 per mBtu, at $50 per barrel at the Iran-Pakistan border. Subsequent transport costs would raise it further. New Delhi does not want to pay more than $4.25 per mBtu for the gas delivered through the 2,100 km line at its border.
Implementation of the project will lead to India receive natural gas from Iran’s giant gas field South Pars via a 2,735 km pipeline of which 764 km will pass through Balochistan in southern Pakistan. The proposed pipeline will transport around 150 million standard cubic meters of gas daily.
If the project gets going, there are chances of Russia also joining in. India has already welcomed the Russian proposal to join through technological, financial and investment assistance. On this, Indian Minister for Petroleum and Gas Murli Deora said recently: “It is very important that we from India welcome the participation of Russian companies in the India-Pakistan-Iran gas pipeline.”
India is also keen for a stake in future Sakhalin oil and gas projects in Russia’s far east. India will push forward its demand during President Vladimir Putin’s visit later this week. Videsh Ltd of Oil and Natural Gas Commission (ONGC) has 20 percent stake in Sakhalin-I field fetching 2.4 million tons of crude per annum. India is keen on the participation of OVL (ONGC Videsh Ltd) in Sakhalin-III fields, a top official said.
