Iran, India SPA No Longer Valid

Last October, Tehran linked its energy dialogue to India’s nuclear diplomacy asking New Delhi to support Iran in the next meeting of the IAEA board of governors in November. That November meeting saw no vote and now Iran is back to flexing its energy muscle ahead of the crucial IAEA meeting this week, the Indian Express reported. After having signed a Sale Purchase Agreement (SPA) last June to export 5 million tons per annum of LNG to India at a price linked to $31-per barrel crude, the National Iranian Gas Export Company (NIGEC) told India that the price agreed to in that pact is no longer valid.

This despite the fact that Tehran never raised the issue of a price hike even when international crude had touched $68 a barrel last August. However, a spokesman for the NIGEC told a visiting Indian team earlier this month that it wanted to re-negotiate the price at current market conditions. The Indian team was headed by Joint Secretary (Gas) Ajay Tyagi and included GAIL (India) Ltd’s Director (Business Development) B S Negi. Last June, three separate SPAs were signed: between NIGEC (from the Iranian side) and GAIL (India) Ltd, Indian Oil Corp and Bharat Petroleum Corp (from Indian side) for export of 5 million tons of LNG. An agreement for an additional 2.5 million tons could not be reached due to the higher price being sought by NIGEC than what was agreed for the 5 million tons. Later, in October, Iran withdrew its price offer for the additional 2.5 million tons on the grounds that crude prices had skyrocketed.

(Source: Indian Express)