India's $22 billion deal to import LNG from Iran appears to be in limbo, with Tehran saying that the June 2005 contract cannot be implemented as it had not been ratified by its Supreme Economic Council.
Indian officials, however, said Iran was seeking a higher price for the LNG, which New Delhi was not open to renegotiate.
Iranian Deputy Oil Minister Hadi Nejad Hosseinian said the June 2005 deal between National Iranian Gas Export Company and IOC-GAIL-BPCL needed to be ratified by Iran's Supreme Economic Council, which has raised several issues. He, however, did not elaborate on the issues but said, "Since it has not been ratified, as far as we are concerned the contract is not implementable."
India very much part of gas pipeline: Iran
An Indian official said that Iran had sought a higher price for the LNG, but India was not willing to renegotiate the contract.
The legal opinion New Delhi has obtained states that the contract was binding on both parties. The official said the June 2005 contract for import of 5 million tonnes of LNG per year for 25 years was only to be approved by NIGEC's parent firm National Iranian Oil Company.
Nowhere in the contract was it mentioned that the deal needs the Supreme Council's ratification. The Iranian Minister said the deal for Iran-Pak-India gas pipeline, which is being negotiated by the three countries currently, will also need the Supreme Council's endorsement and even after the three countries signed an inter-government agreement in June, the Council could in effect nullify it.
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