Thursday, August 03, 2006

India, Pakistan offer half Iran's gas asking price

Iran's Deputy Oil Minister Mohammad Hadi Nejad-Hosseinian said on Thursday India and Pakistan were offering to pay only half the amount for Iranian gas that Tehran was seeking as part of efforts to agree a pipeline deal. READ MORE

"The price of the seller is about twice (that which) the buyer is asking for," he said. The gas would be delivered through a proposed $7-billion pipeline to run through Pakistan.

In India for a two-day meeting with officials from the South Asian neighbours and rivals, Nejad-Hosseinian said Iran's price tag would benefit all.

"The price we are asking is fair and just. We have a report saying that it is a good price for India and Pakistan."

Iran has the second-largest natural gas reserves in the world behind Russia - about 940 trillion cubic feet - while growing Asian economies, including India and Pakistan, are scrambling to find energy sources to feed industrial expansion.

India has to tread a tightrope in the pipeline talks, trying to satisfy its appetite for hydrocarbons while not upsetting Washington. It faces a natural gas deficit of 200 million cubic metres a day in 20 years.

India has reached a landmark civilian nuclear cooperation deal with the United States that is intended to boost the country's nuclear power capacity as a way to meet soaring energy needs.

The deal is currently being reviewed by U.S. legislators amid criticism it would reward India with nuclear technology and fuel while the country refuses to sign the Nuclear Non-Proliferation Treaty and has conducted nuclear tests.

Experts say the agreement would allow India to produce nuclear weapons easily because it frees up domestic supplies for military use.