India and Iran have failed to seal a LNG-for-oil field deal with Tehran offering a "very high" price for the 5 million tonnes LNG it plans to sell to New Delhi.

"Their (Iranians) offer price was unacceptable. We cannot buy LNG at that price," a senior industry official said.

Petroleum secretary S C Tripathi had led a delegation to Tehran on November 23-24 but the deal could not be finalised.

The official refused to indicate the price Iran was quoting but said it was much higher than theprice at which New Delhi currently buys LNG from Qatar.

Iran, which holds the world's second largest gas reserves in the world, wants to sell 5 million tonnes of LNG per year to New Delhi and offered developmental rights on an oil field.

"Their (Iranian) law does not give equity to foreign companies in oil and gas fields. What they proposed was a fixed rate of return on the capital Indian companies would be investing in developing the oil fields. This is certainly not an attractive proposition," the official said.

The Indian delegation, which comprised Indian Oil Corp chairman M S Ramachandran and GAIL chairman and managing director P Banerjee, had gone to Tehran to seal the deal.