The breakthrough came after British consultants Gaffney, Cline and Associates recommended that Iran change its proposed pricing formula. Iran wanted a gas price equal to 10 percent of the Brent crude price plus $1.20 per million Btu. The consultants suggested instead that Iran use a price equal to 6.3 percent of the six-month average of the Japan crude cocktail – as long as JCC was between $30 and $70 per barrel – plus a fixed $1.15 per MMBtu. Under this formula, if the six-month JCC averaged $60 per barrel, the cost of gas at the Iran-Pakistan border would be $4.93 per MMBtu. If the JCC average fell outside the specified parameters, the multiplier would drop to 5 percent, with a fixed component of $1.54 per MMBtu below the $30 floor, or $2.06 per MMBtu above the $70 ceiling.

Accordingly, the delivered price at the India-Pakistan border would be approximately $6.50 per MMBtu, after the inclusion of fees for its transportation through Pakistan. India had earlier said that it was not amenable to paying more than a $4.25 per MMBtu delivered price for gas at the Iran-Pakistan border, or $4.75 per MMBtu at its own border. In the formula proposed by Iran in August 2006, the gas price at the border (assuming Brent at $60 per barrel), would have been $7.20 per MMBtu.

India and Pakistan had earlier rejected a proposed gas sales price suggested by Gaffney, which Iran brought in last September to help bridge the gap between Iran’s suggested $9 per MMBtu and the $5.50 proposed by India and Pakistan.

The appointment of Hojjatollah Ghanimifard (the National Iranian Gas Company’s director of international affairs) as Iran’s chief negotiator for the pipeline’s trilateral working committee appears to have been key to the deal’s success. Whether it was charm, good timing, or just plain luck, Ghanimifard apparently managed to convince both India and Pakistan that the deal was in their best interests.