GCA to advise gas price for Iran-Pak-India pipeline
UK-based international advisory firm Gaffney, Cline and Associates has been appointed to advise on the price of Iranian natural gas to be supplied to India and Pakistan through a proposed $7-billion pipeline.
By PTI |
NEW DELHI: UK-based international advisory firm Gaffney, Cline and Associates has been appointed to advise on the price of Iranian natural gas to be supplied to India and Pakistan through a proposed $7-billion pipeline.
"GCA will submit a report on gas pricing for the Iran-Pakistan-India pipeline by month end," a senior official said here.
India, Pakistan and Iran had on August 4 agreed to try one last time to break the impasse over pricing of gas by seeking opinion of an international consultant on the issue.
A technical group of the three countries will validate the GCA report before secretary-level talks in Tehran in November.
Appointment of the independent, international advisory firm was necessitated following a standoff between the seller and the buyers with Iran wanting a price linked to crude oil while buyers India and Pakistan jointly seeking a price band with a floor and ceiling.
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The official said Iran wanted a price equivalent to 10 per cent of ruling Brent crude oil price, plus a fixed cost of $1.2 per million British thermal unit. At $60 per barrel, the average Brent price during recent times, this translated into a price of $7.2 per mBtu at Iran-Pakistan border. Added to this would be the cost of transporting the gas through Pakistan.
The official said an international consultant was needed because there were substantial differences between buyers and sellers on transportation and gas processing costs.
While Iran is insisting on a transmission cost of $1.2 per million British thermal unit, India and Pakistan are suggesting one-fourth of this cost.
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On gas processing, Iran said $0.4 per mBtu would be charged, but the buyers said $0.2 was a more reasonable price, he said.Iran has set a two month deadline for India and Pakistan to agree on the pipeline or it would earmark more of its reserves for liquefied natural gas (LNG) projects.
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"(They) are not prepared to pay the real price of gas in the market, therefore, we are reviewing increasing the capacity of gas allocated to LNG," Iran's Deputy Oil Minister for International Affairs Mohammed Hadi Nejad-Hosseinian said at a conference in Singapore last week."We may increase the capacity to these LNG projects and decrease capacity allocated to the pipeline."
New Delhi, however, is willing to pay no more than $4.25 per mBtu for gas delivered through the 2,100-km line at its border, he said.
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