GAIL INDIA, a leading Indian LNG importer, has reached the agreement with the state-run NIOC, PIN reported.
Iran has refused to lower the price of the liquefied natural gas it plans to sell to India, arguing that it was offering the most competitive price at $2.22 per million British thermal units (MBTU).
Though the price offered by Iran is lower than Qatar's $2.53 per MBTU sale price to Petronet LNG, India's primary LNG import firm, the government is asking for a price lower than $2 per MBTU to keep the delivered cost of regasified-LNG to power and fertilizer plants at around $3.50 per MBTU.
The delivered price of Qatar gas is $4.80 per MBTU while at $2.22 per MBTU, the delivered price would be just over $4. Currently, natural gas produced by private firms in India is sold at $3.40 per MBTU.
"If we get Iranian gas at $1.85 per MBTU, then we can ask Rasgas of Qatar to lower its price," sources said.
Petronet's contract with Rasgas to buy 7.5 million tons of LNG implies that Qatar will match the price of any company offering to sell India LNG at a price lower than its $2.53 per MBTU.
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MNA