Iran seeks changes in IPI price accord: Some progress reported in Delhi talks
By Jawed Naqvi
NEW DELHI, June 28: Iran on Thursday sought last-minute changes in an agreement on the price of natural gas that it is to supply to India and Pakistan through a $7.4 billion pipeline, even as New Delhi and Islamabad reached an agreement on transportation charges.
At the tripartite official level talks here, Tehran asked to insert a clause for a revision of the price formula every three years based on international fuel prices and energy mix, a stipulation that was opposed by India and Pakistan, Zeenews said quoting sources.
Since India and Pakistan had already agreed to the original formula proposed by Iran, according to which gas would be priced at $4.93 per million British thermal units (mBtu), they wanted it to remain the basis of pricing of natural gas for the entire 25-year duration of the contract.
The official level talks, the last before a ministerial meeting next month for signing a final deal, will continue on Friday.
In their bilateral meeting, India and Pakistan are said to have reached an agreement on the principle of computing the transportation charges payable to Islamabad for wheeling the gas through the 1,050-km section of the pipeline in Pakistan. “But the issue of transit fee, payable to Islamabad for allowing passage of the pipeline to India, was not resolved as the officials decided the issue may be best left for the political leadership to discuss,” Zeenews said.
The proposed pipeline will initially carry 60 million cubic metres of gas, split equally between Pakistan and India. The delivery point would be at the Iran-Pakistan border.
Pakistan was previously seeking a transportation tariff of $0.7-$0.75 per mBtu while New Delhi is willing to pay no more than $0.55 per mBtu ($220 million annually). India has reportedly decided to go along with the Pakistani number.
On transit fee, Islamabad is seeking $0.493 per mBtu while New Delhi has offered $0.20 per mBtu.
