Monday, July 03, 2006

No cheap gas for Pakistan, India, says Iran minister

Gulf Times:
Iran won’t discount the price of its natural gas due to flow through a proposed $7.4bn pipeline to Pakistan and India because of global demand, said Hadi Nejad-Hosseinian, Iran’s deputy oil minister for international affairs.

Other countries are prepared to pay a “heavy price’’ for the Iranian gas, Nejad-Hosseinian said on Petroenergy Information Network, the oil ministry’s press agency. He said Iran won’t be in a position to satisfy the combined demand of European and South Asia customers.

If we want to export to both destinations, then we will have to cut the volume,’’ the deputy oil minister said.

Europe is asking for 100mn cu m of gas a day, while India and Pakistan need 150mn cu m of Iranian gas, he said. READ MORE

Oil officials from Iran, Pakistan and India are due to meet in the last week of July to discuss gas pricing for the energy link, labelled the “Peace Pipeline’’ by Iran.

India and Pakistan have agreed to start building the pipeline in 2007, although neither has yet said anything about funding.

The US has urged India to shun the project in order to isolate Iran, which it says is trying to make nuclear weapons. The project was conceived a decade ago.

In parallel, Iran is seeking to increase its supplies to Europe via Turkey through the planned “Nabucco” pipeline.

A group of companies, led by Vienna-based OMV AG, plans to spend 4.6bn euros ($5.8bn) to build the pipeline linking Western Europe to the Caspian Sea and possibly Iran and Iraq. The Nabucco pipeline is due to open in 2011.

Iran, holder of the world’s second- largest oil and gas reserves, has signed a preliminary agreement with Thailand over the annual sale of 3mn tonnes of liquefied natural gas, Iran’s oil ministry reported. Iran is planning to sell the gas to PTT Exploration & Production Pcl, Thailand’s second-biggest natural-gas producer, Petroenergy Information Network, said on its website.

The agreement was signed in Tehran on Saturday in the presence of Thai Energy Minister Viset Choopiban and Hadi Nejad-Hosseinian, it said.

Iran, the second-largest oil producer in the Organisation of Petroleum Exporting Countries, has been lagging behind Qatar in developing South Pars, the world’s largest deposit of natural gas.

Qatar has found buyers for most of the 77mn tonnes of liquefied natural gas it expects to have available by 2010. Iran has signed only one sales agreement, with India, over the shipment of 5mn metric tonnes of LNG a year starting in 2009.