India Mulls Raising Price of Iran Gas

India is considering raising the price of liquefied natural gas (LNG) from Iran to US$4.50 per million British thermal unit (mBtu), Indo-Asian News Service reported Monday.

Indian Petroleum Secretary M.S. Srinivasan was quoted as saying that the LNG price for long-term supply could be pegged to the crude oil price of 45 to 50 U.S. dollars per barrel, which translates into US$4.50 per mBtu.

The price is higher than US$2.90 per mBtu, which was set in the agreement with Iran in 2005, but lower than US$5 per mBtu offered by Iran now.

India reached an agreement with Iran for supplying 5 million tons of LNG annually from 2009 for 25 years and Iran has proposed a price rise due to an oil price hike in the international market.

Indian Petroleum Minister Murli Deora last month agreed to Iran's demand for renegotiating the LNG price.

"The possibility is under consideration. With the seesaw in the international price of crude, it (the price) has to be a well thought out decision," Srinivasan told the media on the sidelines of a conference in New Delhi.

Srinivasan said a final decision on the price would require cabinet approval.

Copyright 2006 Xinhua News Agency.

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Brent Crude Oil : $59.02/BBL 3.79%
Light Crude Oil : $52.22/BBL 3.07%
Natural Gas : $2.92/MMBtu 1.31%
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