India, Pakistan and Iran to appoint global consultant for gas pricing

India, Pakistan and Iran have failed to reach an agreement on gas price for the three-nation gas pipeline project after a meeting on Friday.

The meeting of nine members committed, aiming to fix the gas price, started on Thursday and ended yesterday with a decision to appoint an independent consultant for the gas price fixing.

In the meeting, Iran Friday asked for renegotiating the price for the liquefied natural gas (LNG) to be supplied to India for 25 years.

As per the reports, Iranian Deputy Oil Minister for International Affairs Mohammad- Hadi Nejad-Hosseinian put forth the issue with Indian Petroleum Minister Murli Deora on the sidelines of the India-Pakistan-Iran meeting on the three-nation gas pipeline project.

"The (renegotiated) price they are seeking is unrealistic. They are asking for more than double. If we accept, it would mean an additional implication of 12 billion U.S. dollars," Deora was cited as saying.

India and Iran inked an agreement last year that Iran will supply 5 million tons of liquefied natural gas (LNG) to India annually for 25 years from 2009. Deora said India has considered the deal, worth of 22 billion U. S. dollars, as final. Iran intends to sell its gas at 8 U.S. dollars per million British thermal unit (MBTU) while India has earlier proposed 4.25 U. S. dollars for gas delivered at its border with Pakistan.

Although the three countries had failed to achieve the desired end on price, they were still keen on implementation of the project, said Iranian Deputy Oil Minister.

India's Petroleum Secretary M.S. Srinivasan informed that India and Pakistan had together proposed two consultants and Iran would now select between the two.

“We have decided to appoint a consultant who will help us to get closer to a price formula. The consultant's report will, however, not be binding,” Nejad-Hosseinian said.
The consultant will be expected to hand over a report in 30 days of period and then Iran would host another round of trilateral talks.

India desires to import 90 million standard cubic meters of gas per day from Iran through the proposed Iran-Pakistan-India pipeline and Pakistan needs 60 million.

A news agency cited official sources as saying that India, however, has raised the price a slightly higher to 4.42 U.S. dollars per MBTU from earlier 4.25 U.S. dollars but received no favorable response from Iran.