BusinessLine: With agreement on prices, India and Pakistan set to seal gas deal

India will soon be ready to seal a deal with Pakistan for sale of liquefied natural gas (LNG) to the country as a consensus on pricing seems to have emerged.

Pakistan wanted India to revise the price that was offered initially, while New Delhi had insisted on a sovereign payment guarantee.

“There is just one more meeting that is required to finalise the deal and after that India will be ready to sell gas to its neighbour,” a Government official told Business Line.

Landed cost of imported gas on India’s LNG terminals in August averaged at about $15/mmBtu (long term), while spot rates were $16/mmBtu, this is excluding re-gasification, local taxes and levies, transmission charges, marketing margins. With these components, the rate of the gas for the end consumer is around $18-$20/mmBtu.

Pakistan has decided to do away with the customs duty component. “Both issues (pricing and payment guarantee) have been settled. Pakistan will be getting gas from India at a price much lower than what it is getting from other sources at present,” the official added.

Sales will start once the pipeline from Jalandhar to Wagah to transport the gas is in place which could take up to a year. MORE