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February 06, 2007 14:50 IST
India is likely to sign a $145 billion deal by June to import natural gas from Iran through the proposed Iran-Pakistan-India pipeline after Tehran lowered the sale price by 30 per cent.
"On preliminary analysis, the new price offered by Iran looks alright for us. Subject to satisfactory conclusion of the Gas Sales and Purchase Agreement, we may sign a deal with Iran by June," Petroleum Minister Murli Deora said on Tuesday.
Meanwhile, the gas pipeline has also received a boost with Pakistan and Iran reportedly reaching an agreement on pricing structure.Iran Oil Minister Kazem Vaziri Hamaneh has said that Iran and Pakistan reached agreement on the final sale price of the gas to be transferred through the pipeline that is to be built from Iran to India through Pakistan. Tehran, as a last ditch attempt to salvage the project that would give the US sanction hit country about $9.5-billion in revenue annually, has changed the price formula from 10 per cent of the ruling Brent crude oil price plus $1.2 per million British thermal unit (mBtu) fixed cost to 6.3 per cent of the Japanese crude cocktail (JCC) plus $1.15 per mBtu.
At 60 dollars per barrel crude price, the cost of gas at Iran-Pakistan border translates into $4.93 per mBtu according to the new price formula proposed by Iran at the official level talks at Tehran on January 24-25.
As per the previous formulae, proposed in August 2006, gas price came to $7.2- per mBtu at $60 per barrel crude oil price.
Besides, India would pay $1.5 per mBtu for piping gas through Pakistan and transit fee to Islamabad. Petroleum Secretary M S Srinivasan said, "The price looks comfortable."
At $4.93 per mBtu, India will pay $5.768 billion annually to buy 90 million standard cubic meters per day of gas.
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