The deal has removed the main obstacle to the signing of a three-way agreement on building the 2,300 km Iran-Pakistan-India (IPI) pipeline with an estimated price tag of $7.5 billion. The first deliveries from gas-rich Iran are expected in 2011.

The price formula is based on the cost of natural gas in Japan, which has been accepted as the most suitable yardstick. Japan is one of the world’s largest consumers of natural gas, and has a relatively stable energy market.

India and Pakistan are under U.S. pressure not to do business with Iran in the energy sector. But the parties to the project have repeatedly stated their resolve to move forward with the key project, regardless of Washington’s opposition. -Neftegaz.ru