LNG from Iran likely to cost more

Iran on Thursday made no firm commitments of honouring the $22-billion deal to export LNG to India but said will look at "ways" for early implementation of the two-year-old contract.

Petroleum Minister Murli Deora, who made an unscheduled stopover at Tehran on his way back from a week-long trip to energy-rich Syria, Algeria and Egypt, called on Iranian President Mahoud Ahmadinejad to press for early implementation of the June 2005 contract wherein Iran committed to supply 5 million tons of LNG annually for 25 years beginning 2009-end.

"Ahmadinejad reassured (Deora) that the Iranian side is also committed to the projects (LNG supply contract and a separate project to export gas through the Iran-Pakistan-India pipeline), which will be implemented to mutual satisfaction.

"In particular, the President advised the Iranian oil ministry to look at ways to ensure early implementation of the LNG contract," a release issued by India's petroleum ministry after the meeting said.

The release did not say if the Iranian President clearly stated that the LNG contract will be honoured on terms agreed and signed in June 2005.

Iran has made no bones about it wanting a higher price than the one agreed in 2005 and has said its Supreme Economic Council will not ratify the deal at the earlier agreed price of $3.215 per million British thermal unit. It now wants at least $5.1 per mBtu for the LNG.

Besides the deal to ship gas in its liquefied form, Deora also discussed the price expected by Iran for exporting gas through the proposed Iran-Pakistan-India pipeline. Iran is seeking $4.93 per mBtu price for gas exports through the over $7 billion pipeline.