Difficulties in implementing gas deal with India: Iran

NEW DELHI: In a major blow to India's plans to source gas from Iran to meet its energy needs, Tehran on Sunday said there are difficulties in honouring the 22 billion-dollar contract to sell Liquified Natural Gas (LNG) to New Delhi.

"I think both sides (have) found out that there are some specific difficulties to implement the project, the agreement as it is now," Iran's Foreign Minister Manouchehr Mottaki told NDTV in an interview in Tehran.

Iran had in June 2005 agreed to supply five million tonnes of LNG for 25 years beginning in 2009-10.

It has since then not been able to source technology to liquify gas, a domain of US and European companies that are not inclined to provide the know-how to Iran in view of
American economic sanctions.

"I think now both sides understand that it is a little bit complicated because of the changing circumstances from the time when the contract and the agreement was signed," Mottaki said.

New Delhi has, however, insisted that Tehran honour its commitment and has even sought legal opinion to see if the contract can be enforced.

Union Petroleum Minister Murli Deora had raised the issue of implementing the contract with Iran's President Mahmoud Ahmadinejad in Shanghai last month.

After the meeting, Deora had said that Iran must honour all its commitments and there was no question of re-negotiating or reopening the June 2005 LNG supply contract.