India Reportedly Wants Cheap Gas

India Reportedly Wants Cheap GasIndia Reportedly Wants Cheap Gas

Instead of buying natural gas from Iran and converting it into urea, India is now planning to construct petrochemical complexes in Iran, but disagreements have emerged during negotiations on terms of cooperation, Tasnim news agency reported.

India wants to produce 7-8 million tons of urea in Iran, and is prepared to invest in the construction of petrochemical complexes. However, the 2-cent price it has proposed for gas as feedstock for petrochemical units is "far too low," deputy managing director of the National Petrochemical Company (NPC), Mohammad Hassan Peyvandi, said.

Abundance of liquefied feedstock and gas needed for petrochemical projects makes Iran a distinctive target for investment. However, uncertainty over a long-term feedstock price has been a persistent hurdle to foreign investments in the key petrochemical sector.

Formulating a feedstock price is in the final stages, Peyvandi said, adding that the oil ministry, the ministry of industry, mine and trade, and the ministry of economic affairs and finance are trying to finalize the pricing procedures.

Senior Iranian energy officials and an Indian trade delegation, headed by New Delhi's ambassador to Tehran, Dinkar Prakash Srivastava, held meetings last week with investment opportunities in petrochemical projects in Asaluyeh and Chabahar Port in south Iran high on the agenda.