Iran offers cheaper LNG than Qatar

Iran has offered to sell liquefied natural gas (LNG) to India cheaper than what this country is importing from Qatar for its first LNG terminal at Dahej. Moreover, Iran has also offered a 20 per cent stake to ONGC Videsh Limited (OVL) in one of its discovered oil fields.

Iran is learnt to have offered India its LNG at $2.22 per million British thermal unit (mbtu) and a 20 per cent stake in Husseinieh-Khush oil field to compensate for the difference between LNG price and the domestic gas price of $1.58 per mbtu.

For Dahej, Rasgas of Qatar is selling Petronet LNG Limited 5 million tonnes per annum of LNG at an Freight on-Board (FOB) price of $ 2.53 per mbtu.

However, the Iranian FOB price is higher than the $1.72 per mbtu price quoted by Indian officials at the second meeting of the India-Iran joint working group on cooperation in the hydrocarbon sector that began today.

It is learnt that a final agreement on LNG price could not be reached today and discussions are likely to continue tomorrow.

Iran has offered 20 per cent equity in the Husseinieh-Khush oil field and proposed to pay OVL 15 per cent return on investment in developing the field. The equity offered comes to 60,000 barrels per day of crude oil.

The LNG supplied by Rasgas of Qatar is shipped to India at 26 cents per mbtu and regassified at 58 cents per mbtu. After adding taxes and local levies, pipeline transportation cost and margins, the delivered cost of this regassified-LNG in Gujarat is $4.87 per mbtu and outside Gujarat it is $4.93 per mbtu.

On the other hand, the domestic natural gas lands up with the customer at $2.94 per mbtu after royalty, transportation charges and sales tax is pegged to the $1.58 per mbtu basic price.

The private sector Reliance has priced the deep sea gas in Krishna-Godavari basin at $2.70 per mbtu. After the meeting, M H Rahbari of National Petrochemical Co said Iran has also invited Indian firms to participate in the $10 billion petrochemical plant being set up in southern Iran.

Cheaper oil

• Iran is said to have offered India its LNG at $2.22 per million mbtu and a 20 per cent stake in Husseinieh-Khush oil field.
• Rasgas of Qatar is selling Petronet LNG Limited 5 million tonnes per annum of LNG at an FOB price of $2.53 per mbtu.
• LNG supplied by Rasgas of Qatar is shipped to India at 26 cents per mbtu and regassified at 58 cents per mbtu.