September 08, 2008

Iranian update on IPI

National Iranian Gas Export Company said that Tehran has every right to revise the price of gas supplied from the proposed Iran Pakistan India pipeline in view of the increase in energy prices and demand, coupled with the fact that Pakistan and India have not inked any deal yet.

Interestingly, India still seems apprehensive about the successful implementation of the USD 7 billion project, as it is opposed to the draft agreement Tehran has submitted seeking revision of prices at any time during the contract period.

In the past, India’s petroleum & natural gas ministry showed enthusiasm when the first breakthrough on the 2,600 kilometer natural gas pipeline draft deal occurred. But later the ministry described the Iranian proposal as partisan, undermining the interests of two major partners, India and Pakistan.

Meanwhile, Mr Murli Deora India’s petroleum & natural gas minister said that "The Iranian draft agreement has been formulated in a way to allow Tehran to revise the price of gas whenever it likes during the entire contract period in line with volatile global gas prices."

India had also earlier accused Tehran of attempting to betray the commitment it made during several rounds of talks. New Delhi claimed it was concerned that if the condition mentioned in the draft was agreed to, Tehran could walk out of the pipeline project any time.
But Tehran never did walk out of the project.