Iran cancels fuel deal with India


Richard Moore


The Hindu
Online edition of India's National Newspaper 
Wednesday, Sep 28, 2005 
Front Page

LNG deal is off: Iran
Amit Baruah

A blow to India's energy security

NEW DELHI: Iran has informed India that the five-million-tonne
a year liquefied natural gas (LNG) export deal, with
deliveries scheduled to begin in 2009 for a 25-year period, is
off. This was conveyed to Indian officials in Vienna soon
after the anti-Iran vote cast on Saturday by New Delhi at the
International Atomic Energy Agency (IAEA) governing board

Communication comes from Vienna

In a communication to the Prime Minister's Office and South
Block dated September 24, India's Permanent Representative in
Vienna, Sheelkant Sharma, wrote that his Iranian counterpart
had told him the LNG deal, signed between the two sides in
June, was off.

The Iranian Ambassador in Vienna came up to Dr. Sharma after
India's vote and conveyed a message from Ali Larijani, Iran's
top nuclear negotiator, that Teheran was no longer willing to
go ahead with the $21-billion deal.

With this, India's energy security has suffered a major blow.
The agreement was considered a good deal for India; in the
variable component of the price formula the Brent price of
crude was capped at $31 a barrel.

In September, during External Affairs Minister Natwar Singh's
visit to Iran, India was told that the deal was through and
that permission from the National Iranian Oil Company board
would be forthcoming.

The Ministry spokesman said on September 3 that Iran was
considering supply of an additional 2.5 million tonnes of LNG
a year being sought by India. On September 2, Mr. Larijani
said in Teheran: "The issue of exporting LNG to India has been

In Teheran, the Foreign Ministry spokesman expressed surprise
on Tuesday at the manner in which India voted. He said: "Iran
will revise these [economic] relations, and these countries
[that voted against Teheran] will suffer. Our economic and
political relations are coordinated with each other."

"Apocalypse Now and the Brave New World"