New Delhi, March 20:

Iran has made its first pipeline gas price offer of $6 per million British thermal unit (MBTU) — far above what India and Pakistan consider economical, official sources said.

“After 18 months of negotiations, Iran has given the first price offer in the range of $6 million British thermal unit (MBTU) to be delivered at the Iran-Pakistan border,” a senior petroleum ministry official said.

“This is the first fix on the price. Now Pakistan and India will have to do their homework to negotiate for the correct price.”

At a roundtable organised Monday by the Confederation of Indian Industry (CII), Petroleum Secretary M S Srinivasan told the delegates that from the highs of $12-$13 MBTU, the spot price of gas being traded globally has softened to around $7-$8 MBTU.

“For long-term contracts, we expect the gas price to stabilise at around $4.5 - $5.0 MBTU,” he said.

Srinivasan however refused to comment whether India and Pakistan would have to settle for a price in that range considering that the power and fertiliser sector has been insisting for gas price around $3.0 MBTU.

Referring to the first secretary-level trilateral meeting held in Tehran from March 13-15, official sources said besides the gas price, the three countries dwelt on the project structure for the proposed multi-billion dollar pipeline.

“The two options of each country building the pipeline within their territory and the second of a consortium approach were discussed as project framework. The broader details would be discussed at another trilateral secretary-level meeting to be held in Islamabad towards the end of April,” the official said.