India said on Wednesday that a stalled deal with Iran to supply liquefied natural gas (LNG) to India was a stumbling block in making progress with a major natural gas pipeline project.
Talks on the $7 billion pipeline from Iran - holder of the world's second-largest natural gas resources - through Pakistan to India have stumbled as Tehran has asked nearly twice the rate that New Delhi wants to pay for the pumped gas.
"The problem is not in the pipeline, it's in the LNG contract," India's Minister of Petroleum and Natural Gas Shri Murli Deora told Reuters on the sidelines of an Opec conference in Vienna. "We are trying to solve the problems ... we want the LNG first and then the pipeline," he said.
Iran signed a memorandum of understanding to export LNG, gas super cooled to liquid form for shipping on tankers, to India some two years ago but the preliminary deal has faltered, also over the issue of price. Deora said he remained optimistic that an agreement on the pipeline would be reached. A spokesman for Deora said he was due to meet Iranian Oil Minister Kazem Vaziri in Vienna later on Wednesday.
India, Pakistan and Iran agreed last month to appoint an outside consultant to suggest a price for the pipeline gas. Iranian officials had offered a price linked to Dated Brent crude that equated to about $8 per million British thermal units (mmBtu), while New Delhi wants to pay about $4.25 per mmBtu.
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