Iranian gas, through a pipeline via Pakistan, will cost $2.40-2.49 per million British thermal unit at the Indian border, according to estimates by international consultants working on the 2775-km Iran-India pipeline project.
Piped gas from Iran would be cheaper than importing it in liquefied form through ships. Re-gassified LNG from Iran would cost $4.10 per mBtu, industry sources said.
While India last month signed a contract for import of 7.5 million tonnes per annum of LNG from Iran for 25 years beginning 2009-10, the Union Cabinet on Wednesday authorised the petroleum ministry to begin negotiations with Iran and Pakistan on importing natural gas through an on-land pipeline.
A 56-inch line from Assaluyeh in Southern Iran to Rajasthan border, carrying 137 million standard cubic meters per day (mmscmd) gas, would cost $4.5 billion. The delivered price of gas at Rajasthan border would be $2.40 per mBtu, industry sources said.
Gas through 48-inch pipeline, costing $3.9 billion, would cost $2.43 per mBtu while the same through a 42-inch pipeline, costing $3.1 billion, would cost $2.49 per mBtu.
"Pakistan will earn $199-$413 million in transit fee," a source privy to the preliminary feasibility reports made by consultants including BHP Billiton said.