Hojjatollah Ghanimifard told PIN the views of Pakistan and India on price were getting close.

“At this stage, we are negotiating on the trilateral contract and gas will be exported to India when the two states reach an agreement,” the international affairs manager of National Iranian Oil Company (NIOC) added.

“The deadline for finalization of the contract is June 30,” recalled the chief negotiator, expressing hope all problems would be settled by the date.

Talking about Turkmenistan’s exporting gas to Pakistan and India, Ghanimifard said competition in gas market was completely natural, however, adding if conditions were based on logical and international norms, the contracting parties would prefer Iran.

“The initial demand of Pakistan and India for Iran’s gas amounted to 150 million cubic meters per day, but we announced that Iran had now the capacity to supply 60 million cubic meters of commodity daily and we could increase its volume in next phases,” said the official, concluding that it was natural that Pakistan was seeking a contract with Turkmenistan as Iran was not able at present to meet Pakistan’s need fully.

The special envoy said the last round of peace pipeline talks would be held in Pakistan, expressing hope the three states would reach an agreement on price in Tuesday’s and Wednesday’s negotiations.

During his last month visit to Iran, India’s Petroleum and Natural Gas Minister Murli Deora underlined the necessity to sign the contract on the peace pipeline by end of June.

“The talks now hinge on agreement over the tariff to be charged by Pakistan for gas transported through its section of the pipeline for delivery at the Indian border,” said Deora.  

The minister said he did not expect there to be any major delays in signing a full sales and purchase agreement. “The commercial agreement is nearly complete -- we are working very sincerely,” he said.

Deora said Pakistani Prime Minister Shaukat Aziz had assured the Indian government during his early April visit to New Delhi that Pakistan’s tariff charges for Iranian gas to be supplied to India would be in line with international norms.

Asked how much India was prepared to pay for Iranian gas, Deora said the long-term nature of the sales contract would allow a price “around the $5 per one million BTU” level.

“We are working it out now. It’s a long-term agreement and it should be at a correct price. A price of $6 per one million BTU is definitely too high,” he said.

The tripartite pipeline is a proposed 2,775 km gas pipeline project to deliver natural gas from Iran to Pakistan and India. The project is expected to take three to five years to complete and would cost $7 billion.

The project is expected to greatly benefit both India and Pakistan which do not have sufficient natural gas to meet their rapidly increasing domestic demand for energy. India is predicted to require 400 million cubic meters of gas per day by 2025, up from 90 million cubic meters per day in 2005.

The project was conceptualized in 1989 by Ali Shams Ardakani and R. K. Pachauri. Ardakani is a former top diplomat and deputy minister of mines and metals of Iran. Pachauri proposed the plan to both the Iranian and Indian governments in 1990. The government of Iran responded positively to the proposal.

At the annual conference of the International Association of Energy Economics, 1990, Ardakani backed Pachauri’s proposal.

The pipeline is proposed to start from Assalouyeh, a port city in southern Iranian province of Bushehr, stretching over 1,100 kilometers in Iran itself. In Pakistan, it will pass through Baluchistan and Sind.