India offers 50 per cent raise in price on LNG supply from Iran

Iran Materials 8 December 2006 12:01 (UTC +04:00)

(IRNA) - India has offered to raise the price it was willing to pay by 50 per cent to buy five million tonnes of Liquefied Natural Gas (LNG) from Iran for 25 years.

"India is willing to pay up to 4.775 dollars per million British thermal unit (Btu) as against earlier capped price of 3.215 dollars per million Btu," PTI reported here quoting top official.

In June 2005, GAIL (India), Indian Oil Corp and Bharat Petroleum signed a deal to import 5 million tonnes of LNG per annum at a free-on -board price of 2.90 dollars per million Btu for the initial two years, reports Trend.

The price would be raised to 3.21 dollars per million Btu from 2011 onward.

The official said as per the formula agreed last year, Iran was to charge India 6.5 per cent of Brent crude oil price at the time of loading of each consignment plus a fixed price of 1.2 dollars per million Btu.

The price, according to this formula, was to be capped at 3.215 dollars per million Btu at 31 dollars a barrel Brent price.

"We are willing to raise the 31 dollars cap to 55 dollars," the official said, adding Tehran had sought a higher ceiling of 65 dollars per barrel.

At 65 dollars, the fob price would come to 5.425 dollars per million Btu.

To this 0.30 dollars per million Btu would be added for transporting the gas in its liquefied form in specialised tankers from Phase 12 in gigantic South Pars.

Of the five million tonnes LNG to be imported from Iran every year, GAIL will be responsible for marketing 40 per cent, IOC 35 per cent and BPCL the remaining 25 per cent, the official said.