Iran to charge more for LNG

Iran is demanding about a dollar more than India's offer of a fixed price of $2.4 per mBtu for importing five million tonnes per annum of LNG from Iran for 25 years, top officials said.

The two sides have not been able to finalise the oil-field-for-LNG deal for more than a year now because of the deadlock over price.

Petroleum Minister Mani Shankar Aiyar will discuss the issue when he meets his Iranian counterpart on Friday, they said.

The FOB price per mBtu demanded by the Iranians was $0.92 plus 0.065 of annual Brent crude average ($ 0.92 + 0.065% of Brent crude average). India's position was $0.92 plus 0.04 of annual Brent average.

But later Tehran hiked the price, changing their price formula to $1.2 plus 0.065 of Brent. "India has refused to accept the new price formula, though it has agreed an escalation of two per cent per annum on the fixed price component after first year of operation," the officials said.

Aiyar will try and break the deadlock at the meeting on Friday with Iranian Oil Minister Bijan Namdar Zanghneh, they said.

New Delhi is courting Qatar for additional supplies of LNG in case talks with Iran fail. New Delhi has contracted 7.5 million tonnes of LNG from Qatar at $2.53 per mBtu and is seeking additional 5 million tonnes at the same price.

Tehran was to give India a 20 per cent share in the development of its biggest onshore oilfield, Yadavaran as part of its plans to sell 5 million tonnes of LNG.

Iran was also offering Indian firms a stake in the Jofeir oil field if India purchases an additional 2.5 million tonnes of LNG annually.

Yadavaran has a potential to produce 300,000 barrels per day while Jofeir can produce 30,000-40,000 barrels per day.

"In both Yadevaran and Juffair oilfields, Indian firm was to get a fixed rate of return on the capital it invests in bringing the field to production. We were not given the ownership of oil," the officials said.