The US could not have been quicker. Last month, immediately after a visit by an Indian team to Pakistan to negotiate the pipeline transit fee, Petroleum Secretary M S Srinivasan had assured Iranian deputy oil minister for International Affairs Mohammed Hadi Nejad-Hosseinian that New Delhi would be ready by June to sign the Framework Agreement and Gas Sales & Purchase Agreement.

The letter made no mention of the gas price, an indication that New Delhi was agreeable to Iran’s offer price of $4.93 per million British thermal units (mBtu) down from $7.17 per mBtu Tehran had asked last August.

India’s interest in the pipeline is also depicted by the quick meetings being held with Pakistan on transit fee and the transportation charges. Mukhtar Ahmad, energy advisor to the Pakistan PM, is meeting Srinivasan tomorrow. Islamabad is seeking a transit fee of 10 per cent of the gas price while India is willing to pay a maximum of 5 per cent. At Japanese Crude Cocktail price of $60 per barrel, Pakistan is demanding $0.65 per mBtu while India is offering $0.25 per mBtu. There is progress in India’s only ongoing energy project in Iran — the exploration by ONGC Videsh Ltd in the Farsi offshore block. Three wells have been spud and have been found to hold heavy crude oil. “OVL is working on the geological model to establish the reserves and the development model,” said a company official.

Assignment of discovered oilfields to OVL in lieu of buying 5 million tonnes of LNG has moved a bit with OVL submitting the development plan for Jufeyr field. Iran is yet to respond even as it has reneged on the LNG that it signed with Indian firms for the 5 million tonnes. What would be threatened most by the US warning is Essar’s plan to build a refinery at Badar Abbas. Essar is also keen on taking a stake in an Iranian gas field to not only feed its power but also to ship LNG for its steel plant at Hazira.