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Pak to import gas from Iran under IPI project

Written by: Staff

Islamabad, Oct 21: Pakistan has agreed to import 5 billion cubic feet gas per day from Iran under the proposed 3.6 billion dollars Iran-Pakistan (IP) gas line, senior officials said.

The development came following the finalising of the Gas Sale Purchase (GSP) agreement draft between the two countries yesterday to materialize the 7.4 billion dollars Iran-Pakistan-India (IPI) gas pipeline project.

The heads of both the countries will sign the agreement during the current year.

Pakistan and Iran are currently holding technical talks at the Joint Working Group level. The special representative on gas project Dr Ghanimi Fard, led the Iranian side to the talks while Secretary Petroleum Farrukh Qayum led the Pakistan team.

According to the official who attended the meeting, now under the new scenario in the wake of India's ''evasive'' attitude as the Indian experts did not participate in the meeting held in Tehran as well as Islamabad, both Iran and Pakistan have decided to materialise the IP project and to make the project economically viable, the authorities concerned here have placed new offer that Pakistan would import 5 billion cubic feet per day gas through the pipeline having radius of 56 inches.

''We have also asked the Iranian authorities that the gas to be imported from Iran can also be exported to China in the shape of LNG (Liquefied Natural Gas) as the western part of the China is short of energy. If it happens, then the project would become further economically viable,'' the official was quoted as saying by the News.

The LNG terminal would be made in Gwadar where the proposed IP pipeline would reach and the piped gas would be converted into LNG for export to China through proposed railways line from Gwadar to western part of China.

The Ministry of Railways is vigorously studying the feasibility of laying tracks from Gwadar to China. The official said that Pakistan had also extended offer to Iran to establish its own terminal in Pakistan.

The official also disclosed that both the countries would follow the model of French laws to settle down amicably any dispute with regard to the IP gas pipeline in future after the commission of the project.

When asked if Pakistan had managed to include a clause in the final draft of the agreement which would make Iran bound to uninterrupted supply of gas, the official said that Pakistani experts were very careful in this regard and would ensure the inclusion of every kind of clause that would ensure uninterrupted supply of gas to Pakistan.

When asked as to whether Iran had agreed to take back its demand of revising the gas prices after every three years, the official said that Iranians were a tough nut to crack on this count.

The Iranian delegation refused to respond to Pakistan's offer of revising the price every 10 years and said they would communicate this offer to the top authorities concerned in Iran and then would come up with their response.

''It means that there still exists a deadlock over the Iranian demand on revision of gas prices after certain period of time,'' the delegation said.

Pakistan is of the view that gas prices have already been linked with Japan crude cocktail (JCC) formula, which means in case the crude oil price increases then the gas prices would escalate and in case the crude oil price tumbles then gas prices go down accordingly, so there is no need to revise gas prices.

However, the official said right now in the ongoing talks in Islamabad, both sides had made progress on finalising the four sub agreements, which would be a part of the final draft of the Gas Sales&Purchase Agreement (GSPA).


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