IPI gas project deadlocked on pricing

Islamabad, Oct 20: Pakistan and Iran are still far from agreement on the pricing of a gas import plan.

But officials of the two countries, who are meeting here have decided to finalise the draft of an agreement as quickly as possible to start work on the bilateral pipeline project.

''We are satisfied with the progress as the two sides moved with utmost commitment,'' Dawn newspaper quoted an official source as saying after the third round of discussions yesterday.

Lawyers from both sides were reading the draft line by line and heads of delegations were addressing the difficulties as they arose, the source said.

It further said almost all the aspects of the project had been taken care of but cautioned that it could not be called ''a deal done until it is really done'', given the tedious legalities and politics associated with it.

He said the two sides had agreed to an implementation schedule and would have the first draft of the agreement ready soon.

An official said Pakistan would have a ''much better deal'' with Iran on gas pricing because of cordial relations than with other competitors because Iran had the second largest reserves and many countries, like Armenia, UAE and Switzerland were vying for its gas.

Informed sources said the Pakistani side did not accept Iran's demand for price revision every three or five years and proposed a ten-yearly revision.

The two sides had already agreed to the basic principle of gas price linkage with international market as measured by the Japanese Crude Cocktail (JCC), the sources said.

Pakistan, said the sources, while proposing a ten-yearly revision told the Iranian side that the agreement should be signed not later than December this year.

The Iranian side promised to respond to the offer by the first week of next month and agreed that early signing of the agreement would be in the larger interest of both sides.

The Iranian side to the talks was led by Dr Ghanimi Fard, special representative on gas project, while Secretary, Petroleum, Furrukh Qayum led the Pakistan team.

UNI