NEW DELHI, Feb 11: It’s staring in your face like never before — the $20bn LNG deal with Iran may have just blown off. The Indian authorities may now be forced to take legal action against Iran for violating contractual terms of the 5 million ton LNG deal.

Iran is understood to have hinted at a change in LNG prices even as price differences had cropped up for the additional 2.5m tons LNG deal. This could also be the first sign of bidding adieu to Iran as an energy partner in the short- to medium-term.

The LNG deal was awaiting ratification by the new regime. However, partnering Iran in the energy sector may become increasingly difficult for India if the country is indeed referred to the UN Security Council.

On its part, the Indian side is learnt to have included clauses which will protect their interests if UN sanctions are imposed.

This comes even as questions on the Iran-Pakistan-India pipeline continue to haunt strategy and energy planners in the country.

Sources who have been part of the negotiations with Iranian companies have always maintained that it is difficult to close a deal with Iran as contracts are loaded with devils in the print. “Every contract appears to have several side letters which introduce conditions to the deal,” a source said.

Sources said that Iran first hinted at a change in the prices in the discussions that took place late last year. This came as a shock to the Indian delegation as they were unwilling to reopen the contract. Legal opinion sought by the Indian authorities had maintained that the contract was legally enforceable and binding.

Petroleum ministry officials, however, refused to officially comment on the issue given the “sensitivity” of the matter. The development and its revelation becomes even more serious as it comes a day after the exit of former petroleum minister Mani Shankar Aiyar.

Sources are tight-lipped as this had been counted upon as one of the major milestones of oil diplomacy. India had managed to seal the contract at $3.51 per mmbtu — a very competitive rate, given that LNG has been ruling at around $12 per mmbtu.—By arrangement with The Times of India