Monday, August 07, 2006

Iran Nuclear News: August 7, 2006

Iran: India and Pakistan Gas Offer not Enough, Tribune News Service – Friday, August 4th, 2006

On Friday, India, Pakistan and Iran disagreed over the price of natural gas to be supplied through a proposed $7.4 billion pipeline from Iran to India via Pakistan, but agreed to set up a nine-member committee with three members from each country to look into the matter and report back. Iran is seeking a price of $7.2 per million British thermal units, with a 3 per cent annual increase while India is not prepared to pay more than $4.25 per million British thermal units at its border. Sources said Teheran was hard-selling the formula, saying that it could get $7.8 per mBtu price for the gas if it liquefied it and sold it to the USA and Europe as LNG. The National Iranian Gas Export Co (NIGEC) in a presentation stated that LNG prices by 2010, the time the pipeline is to come, would firm up to $8-9 per mBtu.

Iran Agrees to Consultant for Pipeline Pricing (following Friday’s disagreements), The Financial Express – Saturday, August 5th, 2006

On Saturday – a day after the three countries (India, Pakistan, Iran) disagreed over the price of natural gas to be supplied through the proposed tri-nation pipeline – Iran agreed to India and Pakistan’s proposal to appoint an independent consultant that would suggest “a range of reasonable prices” that could form the basis for further negotiation between the three on the price of natural gas to be exported through the pipeline. Simply put, the third party consultant – to act as neutral umpire – would use LNG price paid by Japan and work backwards to arrive at the gas price at Iranian wells. It would also work out and add Iran’s cost of transporting it to Pakistan border to arrive at the price for India and Pakistan.

Iran: UN Resolution Destroyed Incentive Package – Will Not Suspend Uranium Enrichment, The Journal of Turkish Weekly – Monday, August 7th, 2006

In Tehran, Supreme National Security Council Secretary Ali Larijani confirmed on Sunday that Iran will not suspend uranium enrichment as demanded by the recent UN Security Council resolution. He said the resolution is politically motivated and thus invalid. As a signatory to the nuclear Non-Proliferation Treaty (NPT), Iran will continue its activities under the eyes of the International Atomic Energy Agency and no country can deprive it of its rights. The article goes on to portray Iran’s argument that nuclear technology has become a “national demand” and that the Iranian people will not compromise on their inalienable rights to search for different fuel alternatives. Of particular significance is Iran’s contention that economic sanctions will prove to hurt other countries more than it will hurt Iran.

Oil Futures: Higher (BP Oilfield Shutdown, Iran’s Defiance), Cattle Network/Dow Jones – Monday, August 7th, 2006

This morning, crude oil prices in London traded higher - mostly as a result of BP's Alaskan Prudhoe oil field shutdown over the weekend. Participants also said the defiant Iranian comments in response to the U.N. resolution against Tehran's nuclear enrichment program also set the stage for this early Monday rally. Dow Jones also argues that Iran's bold comments on its commitment to go ahead with the nuclear enrichment plan, rejecting the latest U.N. resolution against Tehran's plan, is also providing a strong base to the prices.

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