With the UN referral issue creating uncertainty about India's future relations with Iran, the Petroleum Ministry is fairly assured of the supply of five-million-ton contracted liquefied natural gas (LNG) from Iran. According to the Hindu Business Line, the 5 mt per annum LNG deal was legally binding, which ends speculations that the $20 billion
LNG deal with Iran may be in trouble. The ongoing negotiations with Iran are for the additional 2.5 mt per annum. The issue of pricing for the contracted 5 mt LNG was not discussed during the recent high-level meeting between the two countries in Tehran. Negotiations for an additional 2.5 mt per annum would be tough, not just because of the way India votes on the referral issue but also because the new government in Iran has some new ideas about gas exports. Recently, there were reports that Iran had sought an increase in the price, not only for the additional 2.5 mt per annum but also for the contracted 5 mt. These reports said that after having signed a Sale Purchase Agreement (SPA) last June to export five-mt per annum of LNG at a price linked to $31 per barrel crude, the National Iranian Gas Export Company (NIGEC) had now informed India that the price agreed to was no longer valid. (Source: The Hindu Business Line)