IPI pipeline: Pak for no compromise on gas pricing

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Islamabad, Sep 19: The Iran-Pakistan-India (IPI) gas pipeline project has hit another roadblock with Pakistan making it clear that it will not succumb to Iran's demand for revising the price of gas every five years, terming it ''unjustified''.

Pakistan has been insisting that the agreed pricing formula was linked to the fluctuations in the Japan Crude Cocktail (JCC) prices.

''Our experts' team is scheduled to leave for Iran on September 23 to remove this bottleneck,'' a senior government official at the Ministry of Petroleum and Natural Resources was quoted as saying by The News.

''There is a deadlock over the demand of Iran which is insisting that the price of the gas to be imported though the IPI gas pipeline should be revised after every five years. Discussions with an Iranian delegation had been conclusive, recently. Now our delegation is going to Tehran and the authorities in Iran have also invited Indian experts to resolve the issue,'' the official said.

The official said in case the talks turn out to be fruitful, Pakistan would send another delegation to Tehran next month to sign Gas Sales and Purchase Agreement (GSPA).

He pointed out that the pricing formula based on JCC was approved by the economic coordination committee (ECC) on April 10.

Under the arrangement if the price of JCC stands at 60 dollar per barrel in the region, then the price of Iranian gas would stand at 4.93 dollar mmbtu. And if the JCC price stands at 70 dollar per barrel, the gas price would be at 5.56 dollar per mmbtu. The gas price would increase to 6.06 dollar per mmbtu in case the JCC price goes up to 80 dollar per barrel.

The official said if the GSPA was signed, then in the first phase, 2.1 billion cubic feet Iranian gas would be imported through the 7.2 billion dollar pipeline that will be equally shared between Pakistan and Iran.

He said that since the route of the pipeline was yet to be decided between the Iranian and Indian border, the cost of the pipeline structure in the Pakistani territory was yet to be determined.

However, he said the cost of laying the pipeline within the territory of Pakistan had been estimated in the range of 3 billion dollrs.

He said two routes of the pipeline were under consideration.

However, the exact length of the pipeline would also be decided after the route gets finalised.


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