India To Invest Heavily on LNG Plant in Iran
iranian.ws
Feb 28, 2004, 17:24
Iran economy news - India has offered to invest over one billion dollars in building a plant to liquefy natural gas in Iran so as to cut the cost of the liquefied natural gas (LNG) from Iran to almost the same levels as that of subsidized natural gas in India. According to the Statesman, a New Delhi-based English daily, the offer to build the liquefaction plant was made by the state-owned gas firm Gas Authority of India (GAIL), the leader of the consortium of public sector oil companies to import of five million tons per annum of LNG from Iran, at a meeting in Tehran earlier this month, IRNA reported. GAIL is trying to hammer down the gas price, including the liquefaction cost, to just over two dollars per million British Thermal Unit (BTU) so that the delivered cost of the regasified LNG in India is around three dollars per million BTU. Sources said the consortium is getting Iran around to fix the gas price through a mix of fixed and variable cost. While two third of the gas price may be static or fixed throughout the tenure of LNG imports, the remaining one-third may be linked to Brent crude oil. During the negotiations for fixing the price of LNG, Iran was quoting a price little less than dlrs 2.5 per million BTU on the pretext that liquefaction costs were very high. "Cost of producing Iranian gas is very cheap and with Indian companies bearing the cost of liquefaction, LNG (natural gas liquefied at minus 160 degree Celsius and shipped in special tankers) from the Persian Gulf to India will be real cheap," sources said.
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