India-Iran sign up on LNG deal
New Delhi: India on Friday signed a pact with Iran to import 7.5 million tonnes of liquefied natural gas (LNG) for 25 years from Iran beginning 2009.

"GAIL and Indian Oil Corp have signed an agreement with National Iranian Gas Export Corporation today to import 7.5 million tonnes of LNG for 25 years," the Petroleum Minister, Mani Shankar Aiyar, said.

An MoU was signed between ONGC Videsh Ltd (OVL) and National Iranian Oil Company (NIOCL) whereby OVL will get a 20 per cent share in the development of Iran's biggest onshore oil field, Yadavaran, and 100 per cent in 30,000-barrels-per-day Jufeyr field. The 20 per cent in Yadavaran would translate into 60,000 barrels per day of crude oil for India, Aiyar said.

R. Javadi, Managing Director, National Iranian Gas Export Corp, said Iran would export LNG from the Phase 12 of the gigantic South Pars gas field. Phase 12 is to produce 15 million tonnes of LNG, of which 10 million tonnes have already been contracted.

Indian companies will also have the right to take stake in the plant that will be set up in Iran to liquefy the natural gas produced from Phase-12. "Indian companies can take up to 4 per cent stake for every one million tonnes of LNG they buy," he said.

The formula for pricing the LNG that was agreed today is reckoned to be a compromise between the extreme positions India and Iran took during last one year of negotiations. There is no official confirmation of the LNG price yet. Yadavaran has a potential to produce 300,000 barrels per day while Jufeyr can produce 30,000-40,000 barrels per day.
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Indo-Iran deal is competitive
New Delhi: The LNG supply price in the Indo-Iran oilfield-for-LNG deal has been described as "fairly competitive" by the power sector generation utilities, especially if the rate stays below $3 per million British thermal units (mmbtu).

The deal, which was signed today, provides for import of 7.5 million tonnes of LNG from Iran at a price of $1.2 plus 0.065 of Brent crude average, with an upper ceiling of $31 a barrel on Brent prices. At the upper Brent crude price of $31 dollars a barrel, the LNG cost would be $3.21 per mmbtu.

According to analysts, the most recent benchmark is of the Reliance LNG supply price for supply of three million tonnes of natural gas for NTPC's gas-based plants, where Reliance quoted an ambitious delivered price (inclusive of transportation, taxes and duties) of $2.97 per mmbtu.

The Indo-Iran deal, however, seems quite competitive when compared with other existing LNG supply contracts currently under way. ONGC's delivered gas price to the power industry from its Bombay High fields is nearly double the Reliance quote for NTPC. Petronas LNG, which competed with Reliance for the NTPC tender, quoted $3.45 per mmbtu only for the LNG supply.

Coupled with the quote of Petronet LNG Ltd, which quoted $0.65 per mmbtu for regassification, the total delivered cost of gas at the power plant would have come to $4.14 per mmbtu as the second best price that NTPC had on offer. The price offered by PLL, the only LNG supplier in the country, is much higher at over $4.5 per mmbtu in Gujarat.
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Baglihar project: Pak threatens to move World Bank
New Delhi: The Indo-Pak secretary level talks for ironing out disputes over the 450-MW Baglihar power project failed to reach an agreement on Wednesday with Pakistan threatening to move the World Bank for appointment of neutral experts.

India, however, maintained that there was a "possibility of convergence on some technical concerns raised by Pakistan" and the matter could still be sorted out bilaterally.

The Baglihar hydroelectric project is being constructed on the Chenab River in Jammu and Kashmir. Pakistan alleges that the project was being constructed in violation of the Indus Water Treaty, whereas India maintains that the project was well within the parameters of the treaty. The Indus Water Treaty gives exclusive rights of Chenab waters to Pakistan.
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Inflation falls to six month low of 6.39 per cent
New Delhi: The annual wholesale price index (WPI)-based inflation fell to a six-month low of 6.39 per cent for the week ended December 25, from 6.5 per cent recorded during the previous week. The fall in the year-on-year WPI rate was largely on account of a drop in prices of fuel, fruits and vegetables, edible oil and manufactured products, according to data released by the Commerce and Industry Ministry on Friday.

The WPI fell by 0.2 per cent to 188.2 points due to decline in fuel and manufactured products' prices by 0.2 per cent each, although primary articles turned costlier by 0.2 per cent during the latest reported week.

The index for primary articles' group rose by 0.2 per cent to 186.1 points mainly due to a spurt in mineral prices and non-food articles. The fuel, power, light and lubricants group index fell by 0.2 per cent to 288.1 due to lower prices of naphtha and furnace oil.

The manufactured products group index dipped by 0.2 per cent to 166.6 points due to cheaper food products, textiles, chemicals and basic metals, even as prices of machinery, beverage and tobacco went up. Among the primary articles' group, the index for food articles remained unchanged at previous week's level of 185 as prices rose for mutton (4 per cent), fish inland (2 per cent), jowar and eggs (1 per cent each), although prices fell for poultry chicken (5 per cent), vegetables (3 per cent), urad (2 per cent), barley, arhar, fruits (1 per cent each).
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PM: Industry must prepare for lower tariffs
New Delhi: The Prime Minister, Dr Manmohan Singh, has asked the National Manufacturing Competitiveness Council (NMCC) to come up with ideas that can help Indian industry in becoming globally competitive and at the same time generate employment in the country.

Addressing members of NMCC here, Dr Singh said that Indian industry should be prepared for lower tariffs and think in terms of world scale production facilities.

Meanwhile, the NMCC intends to come up with a long-term strategy paper on manufacturing. The council has also identified sectors such as textiles, leather, gems and jewellery and food processing for immediate attention.
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