GULF VIEW

 
1- OCCIDENTAL TO REPLACE SHELL IN OIL FIELD DEVELOPMENT IN OMAN
2-
CROSS-BORDER PIPELINE CHINA WILLING TO JOIN
3- SLUGGISH GROWTH IN MIDDLE EAST RISKS UNEMPLOYMENT
 

CROSS-BORDER PIPELINE CHINA WILLING TO JOIN

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India-Iran negotiating gas price


May 09 - 15, 2005
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The much talked about Iran-Pakistan-India gas pipeline project has entered into a phase where India, which was earlier reluctant to become the partner in the project, has now started negotiating over the gas price with Iran.

Though the cost of the project has been escalated from $2.5 billion to current estimates $4.6 billion, however, per head cost may come down if China which has also expressed willingness to join in was welcomed by the three existing partners.

According to reports, India is willing to pay not more than $2.5 per million British thermal units (mbtu) for the Iranian gas to be imported through a 2600-km pipeline via Pakistan.

The task force on Iran-Pakistan-India gas pipeline will visit Tehran these days to discuss the terms and conditions of gas import from Iran through the proposed $4.16 billion pipeline, a government official said.

Iran wants a price equivalent to that of LNG (liquefied natural gas). LNG is costlier than the natural gas transported through pipeline as gas has to be first liquefied, then shipped in cryogenic tankers and finally re-gasified at the import location.

India, through a separate contract, will buy 7.5 million tonnes of LNG per annum from 2010, the re-gasified price of which would be close to $4 per mbtu. This is the price Iran is seeking for delivering gas through the pipeline.

"The Iranian price is not acceptable to us. We will pay no more than $2.5 per mbtu," the official said. International consultant BHP Billiton of Australia had pegged the cost of Iranian gas through a pipeline at $2.40-2.49 per mbtu. New Delhi has decided that the landfall point for the pipeline will be Barmer in Rajasthan.

Iran is committed to sell 60 million standard cubic meters of natural gas per day through the pipeline for 25 years from 2010. The contract can be extended by 5 years. The official said Iran was not willing to sign 'supply-or-pay' contract, which would make it accountable to deliver the gas at Indian borders or else pay for the assured quantity.

Tehran, however, wants New Delhi to commit to a stringent 'take-or-pay' clause where India will have to pay the price even if it does not take the delivery of gas. The official also said Iran had also turned down India's demand for 'rich' gas (natural gas rich in petrochemicals).

The Indian team to Tehran will be headed by Talmiz Ahmad, additional secretary (international cooperation), ministry of petroleum and natural gas and includes Joint Secretary Ajay Tyagi, Indian Oil Corp Director (planning and business development) NK Nayyar and Gail Director (planning) BS Negi.

"Iran will supply gas from phases 9, 10, 15, 16, 17 and 18 of the gigantic South Pars Gas Field," the official said adding the national Iranian gas export company would hold the title of the gas till its delivery at a point on the Rajasthan border.

Tehran wants the price of gas to be indexed to crude oil and petroleum product prices and has asked India to sign a take or pay contract for 95 percent of the annual contract quantity. The official said Iran agreed to India's condition of delivering natural gas through a separate Iran-India pipeline on Rajasthan borders but was unwilling to take the financial liability of the non-delivery of gas that might occur due to disruption in Pakistan. Tehran has also changed the quality of gas to lean gas (gas stripped of ethane/propane) in place of the rich gas promised earlier," he said.

GAS INJECTION INTO OILFIELDS TO INCREASE TO 180M CU. METERS PER DAY

Deputy managing director of the National Iranian Oil Company (NIOC) said injection of the natural gas into the oilfields will increase from the current 80 million cubic meters per day to 180 million cubic meters per day during the Fourth Five-Year Development Plan.

"Personally I do not believe in the notion supported by many experts that the government should stop the natural gas exports and that it should better use it inside the country and inject it into the oil wells because, the gas injected into the oilfields has increased from 50 million cubic meters per day five year ago to the current 80 million cubic meters per day. Moreover, the figure is expected to rise to 180 million cubic meters per day by the end of the Fourth Five-Year Development Plan", noted Mehdi Husseini.

The issue of the natural gas exports has been a controversial matter and conflicting views have been expressed on whether to inject the gas into the oilfields to boost their output or through its export, employ it as a source of income for the government.

MULTIPLYING CELLULAR PHONES IN IRAN

The number of mobile phone SIM cards operating in Iran has exceeded 5.4 million.

A report by the Mobile Communications Company stated that 3 million more SIM cards would be added to the mobile phone network by early 2006.

It quoted another report by the Ministry of Information and Communication Technology (ICT)'s Public Relations Office as saying that 64% of the rural areas have access to telecommunication facilities.

It said 43,800 villages are connected to the national telecommunication network, adding that the number stood at 23,000 at the end of the Second Development Plan in 2000.

Some 28,604 villages were provided with telecommunication facilities during President Mohammad Khatami's tenure, which started in May 1997. The annual growth in telecommunication facilities for rural areas stood at 13.7% in the same period.