(EnergyAsia, April 30, Monday) — India has warned it may withdraw from a proposed gas pipeline project linking it to Iran and Pakistan if Tehran does not offer an ‘affordable’ price for its natural gas.

 

Petroleum Minister Mani Shankar Aiyar said that Iran was insisting on a price equivalent to that of liquefied natural gas (LNG) deliveries to Japan and other markets, a price India said is beyond its mean.

 

LNG now costs twice as much as India’s domestically-produced natural gas.

 

The two countries are also in disagreement over delivery terms. The Iranians want a “take-or-pay” clause that would bind India to pay for gas even if it does not take delivery.

 

The proposed 2,600-km pipeline would deliver natural gas from the Persian Gulf port city of Assaluyeh, near Iran’s South Par gas fields, to Pakistan and from there to India.