Friday, August 4 2006 17:09 Hrs (IST) - World Time -

New Delhi: Officials of India, Pakistan and Iran failed to reach a 'breakthrough' on the price of gas that has stalled any progress in their ambitious tri-nation pipeline project, a senior Pakistani official said today (Aug 4, 2006).

Mukhtar Ahmed, energy advisor to the Pakistani prime minister, said that no 'breakthrough' had been achieved on the issue of appropriate price after their two-day talks on the 2,100 km Iran-Pakistan-India pipeline project ended Friday.

"We have agreed on a course of action to get an objective assessment of what Iran's export options are with a view to working on a rational framework of action," Ahmed told sources.

Official sources at the meeting told sources that the Indian side has put forward another proposal, raising the price a little higher to $4.42 per million British thermal unit (MBTU).

Iran was apparently non-committal over the new offer, said officials. Tehran considers its pricing as fair and just. Official sources said the formula mooted by Iran was to peg the gas price at 10 percent of the average of Brent crude on fortnightly basis with $1.2 as a fixed price component.

At current global prices of crude, the gas price according to the Iranian formula would work out to more than $8 per MBTU while India has earlier offered $4.25 MBTU for gas delivered at its border with Pakistan.

On the price issue, Pakistan's stance was no different from that of India, with its officials saying that it was key to the economic viability of the pipeline project.

The last meeting of the oil secretaries in Islamabad May 22-23 had broken down on the price factor.

India wants to import 90 million standard cubic metres of gas per day (MMSCMD) from Iran through the proposed pipeline that will pass through Pakistan. Pakistan's requirement is 60 MMSCMD.