India, Iran and Pakistan agreed on Friday to appoint a consultant to try to resolve a row over the price of Iranian gas. After two days of intense negotiations, Iran stuck to its demand for a price linked to crude oil, while the buyers jointly sought a price band with a floor and ceiling, the Press Trust of India reported.
"The three nations will jointly appoint an international consultant to study the pricing issue," India's Petroleum Secretary M.S. Srinivasan told reporters in the Indian capital.
Iranian deputy oil minister M.H. Nejad Hossenian said all sides were unanimous on the importance of the seven-billion-dollar project but "the buyers (India and Pakistan) were offering a price, which was half the price the seller (Iran) wanted".
India's Petroleum Minister Murli Deora said the consultant would submit its report in four-to-five weeks after which the officials of the three countries would meet against in Tehran. "This is the last time we are trying to revive the project," an unidentified official said, according to the news agency.
Petroleum secretary Ahmed Waqar said Pakistan and India were united on the cost issue and were looking at a price affordable and reasonable to their domestic markets.
"We are pursuing a bilateral (Iran-Pakistan) pipeline and a trilateral (Iran-Pakistan-India or IPI) pipeline in parallel. If for any reason, India does not join the IPI project, Pakistan would go ahead with the bilateral project subject to the price being affordable," he said.
The Iranian minister said Iran and India had alternative markets for sale and sources of supply. While Iran can sell gas to European markets, India has possible gas sources in Turkmenistan and Qatar. "Decisions (by) each side will be taken in their own national interest," he said.
Deora said India remained committed to the pipeline project. Sources said an international consultant was needed because there were substantial differences between buyers and sellers on transportation and gas processing costs. A tripartite expert committee, formed Thursday to look into the pricing issue, failed to resolve differences, with Iran insisting on a transmission cost of 1.2 dollars per million British thermal unit (mBtu), while India and Pakistan suggested one-fourth of this cost.
On gas processing, Iran said 0.4 dollars per mBtu would be charged, but the buyers felt 0.2 dollars was a more reasonable price, sources said.
Tehran has remained adamant on its crude oil price-linked formula, which at 60 dollars a barrel Brent crude price, translates into a price of 7.2 dollars per mBtu - 60 percent more than what India was willing to pay.
Sources quoted by PTI said Iran wanted a price equivalent to 10 percent of the Brent crude oil price, plus a fixed cost of 1.2 dollars per mBtu. Added to this would be the cost of transporting the gas through Pakistan.
New Delhi, however, was willing to pay no more than 4.25 dollars per mBtu for gas delivered through the 2,100-km line at its border, they said.
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