New Delhi: India is considering raising the price offer for Iranian liquefied natural gas (LNG) to $45-$50 per barrel of crude oil, Petroleum Secretary M.S. Srinivasan indicated here today (Dec 11, 2006).

Iran had asked for a revised higher price for the five million tonnes LNG deal it had signed last year with India.

"The possibility is under consideration. With the seesaw in the international price of crude, it (the price) has to be a well thought out decision," Srinivasan told media persons on the sidelines of a conference here.

He indicated that LNG price for long-term supply of 25 years could be pegged to crude price in the $45-$50 per barrel range that would translate into a LNG price of about $4.5 per million British thermal unit (mBtu).

The price under consideration, though higher than the estimated $2.9 per mBtu settled in the India-Iran agreement for five million tonnes of LNG supply per annum from 2009, is lower than the new price of over $5 per mBtu being sought by Tehran.

Petroleum Minister Murli Deora had last month agreed to Iran's demand for renegotiations of LNG price.

Srinivasan said a final decision on the price would require cabinet approval.

"We may have to go to the higher-level for relaxation, (as it is) something beyond the ministry," he added.

Though global price of LNG has softened over the last few months in tandem with the drop in crude oil prices, the shortage in supplies and continuing volatility in global market has ensured that gas prices, including for long-term supply remains higher than the price of $3 or below per mBtu of LNG.