India, Pakistan and Iran will appoint a consultant to suggest a price for Iranian gas to be delivered to the two South Asian nations through a proposed pipeline after officials failed to agree a rate.
All three nations remained committed to the $7 billion pipeline project, officials said, despite opposition from the US, which is seeking to isolate Tehran over its controversial nuclear programme.
India and Pakistan have suggested the names of two consultants - Poten & Partners and Vicce - and Iran will now choose which it wants appointed. That company will have to submit its report within a month, after which representatives of the three nations will meet in Tehran.
"We have decided to employ a consultant. Based on those figures, we will meet again," Iran's Deputy Oil Minister Mohammad Hadi Nejad-Hosseinian told Reuters during a second and final day of talks on the issue in the Indian capital.
India and Pakistan are at odds with Iran, with New Delhi refusing to meet Tehran's asking price. Iranian officials have offered a formula of 10% of the Brent crude price plus a fixed cost of $1.2 per million metric British thermal units.
At present prices, the Iranian proposal would mean the two South Asian countries paying $8 per MMBtu, an official said yesterday. New Delhi has offered a far lower $4.25 per MMBtu.
Separately, India and Iran are bickering over a multi-billion dollar liquefied natural gas deal - with New Delhi saying Tehran has increased the price tag. Oil ministry officials say that, according to a revised Iranian offer, India would have to shell out $12 billion more over 25 years than previously agreed.
India is treading a fine line as it negotiates with Iran, finding itself sandwiched between the US and one of Washington's chief adversaries. India faces a natural gas deficit of 200 million cubic metres per day in 20 years.
Some lawmakers in Washington have been openly critical of India's links with Iran. But Indian officials sought to play down any link.
"The pipeline has nothing do with our other plans or with US. We are serious about the pipeline," Oil Minister Murli Deora told reporters when asked if New Delhi was cooling towards the project.
The pipeline was first proposed more than a decade ago, but progress has been slow because of hostility between India and Pakistan and, more recently, growing US opposition to Iran.
© Upstream 2006
