New Delhi, February 6
An agreement on the pricing formula for gas to be delivered by the proposed $7 billion Iran-Pakistan-India (IPI) gas pipeline should be signed by June end, said Union Petroleum Minister Murli Deora.

The new price offered by Iran, on preliminary analysis, look all right for us, subject to the satisfactory conclusion of the gas sales and purchase agreement, he said.

The pipeline, if built, will bring Iranian gas to the energy-hungry South Asian nations.

International consultant Gaffney, Cline and Associates has recommended linking the gas price to the average of the six-month Japanese crude basket, preceding the month of delivery.

India is likely to sign deal after Tehran lowered the sale price by 30 per cent.

Tehran has changed the price formula from 10 per cent of the ruling Brent crude oil price plus $1.2 per million British thermal unit (mBtu) fixed cost to 6.3 per cent of the Japanese Crude Cocktail (JCC) plus $1.15 per mBtu.

At $60 per barrel crude price, the cost of gas at Iran-Pakistan border translates into $4.93 per mBtu, according to the new price formula proposed by Iran at the official level talks at Tehran on January 24-25. As per the previous formulae, proposed in August 2006, gas price came to $7.2 per mBtu at $60 per barrel crude oil price.