UPI Energy Watch

India to skip IPI talks over transit fees

India says it won’t take part in talks this week with Iran and Pakistan over a gas pipeline unless the issue of transit fees with Pakistan is first resolved.

Talks in Tehran involving technical experts and lawyers were due to run Monday through Wednesday on the $7.4 billion, 1,700-mile pipeline following an official meeting Thursday, but New Delhi said it won’t go, according to the semi-official Press Trust of India.

"There are crucial bilateral issues that need to be resolved first before we begin discussions on contractual issues on a trilateral platform," a senior Petroleum and Natural Gas Ministry official said, according to PTI.

PTI reported that though India and Pakistan have a broad understanding on the transit fee, there has been no agreement.

"We have communicated to Iran's Petroleum Ministry's Special Representative H. Ghanimi Fard and Pakistan's Petroleum Secretary Farrakh Qayyum that we will not be attending the trilateral meeting unless bilateral issues are resolved with Pakistan," the official said.

The pipeline would run from Iran to India via Pakistan and supply some 90 million cubic meters of Iranian gas to India and 60 million cubic meters to Pakistan every day. Talks have been stalled on that issue because of two factors: the price of Iranian gas and transit fees that India must pay to Pakistan.

The future of the IPI pipeline is uncertain, however, because of strong U.S. opposition to the deal. Washington fears international agreements with Iran will only embolden the country to acquire nuclear weapons. Funding may also be difficult because of the countries the pipeline would traverse. Washington has said it backs a pipeline that supplies Turkmen gas to South Asia.

Deal on Kovykta field delayed

TNK-BP has said it, along with Gazprom, has delayed the closure of the Kovykta gas field deal until Dec. 1.

In June, Russian gas monopolist Gazprom signed a deal with TNK-BP to buy a 63 percent stake in the field, east Siberia’s largest. But in early September, the timeline to complete the deal was extended; “high volume” of work was cited.

"At the latest meeting with (Gazprom Chief Executive Officer Alexei) Miller, we agreed to extend the closure of the deal by two months, until Dec. 1," Viktor Vekselberg, a major investor in TNK-BP, said Friday, according to RIA Novosti.

TNK-BP has evaluated the deposit to be worth $35.6 billion, while Gazprom says it's worth between $600 million and $700 million.

RIA Novosti said the deposit is believed to hold reserves of 2 trillion cubic meters of natural gas, 2.3 billion cubic meters of helium and 115 million metric tons of gas condensate.

CNOOC, COSCO in energy deal

China National Offshore Oil Co. Ltd. and China Ocean Shipping (Group) Co. signed an energy cooperation under which CNOOC shares will be transferred to COSCO.

CNOOC is China’s No. 1 offshore oil and gas producer and the No. 3 oil company in the country. COSCO is China's largest shipping group.

Under the deal, the two sides agreed to jointly exploit energy resources, including liquid natural gas, by transferring CNOOC shares to COSCO Group or co-funding, CNOOC, said, according to the official Xinhua news agency Monday. They will also work together on shipbuilding.

CNOOC and COSCO already cooperate on transporting crude oil, oil products, LNG, natural gas pipes and other facilities, Xinhua reported.

"We are complementary to COSCO in business and prospects for mutual cooperation are promising," said Fu Chengyu, CNOOC chairman and chief executive officer.

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Closing oil prices, Sept. 24, 3 p.m. London

Brent crude oil: $78.35

West Texas Intermediate crude oil: $82.35

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(e-mail: energy@upi.com)