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Iran exports coal to Pakistan!!

Big Tank

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Issue isn’t quality of coal, real issue is the quality of manpower, engineers and scientists this country produces. If similar quality coal was available in US/Canada they would have build a coal thermal system specific to type of coal found in their country.

Pakistanio ko Adat hy gora inky engineering problem solve ker ky dy ga.


Or maybe Iranian funded PPP-MQM Shia politicians in Sindh just returning favor similar to Zardari famous Iran-Pakistan
Pakistan tried to work on Thar coal, wasted a lot of money and resource but the coal was useless
pipeline.
 

Genghis khan1

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Pakistan tried to work on Thar coal, wasted a lot of money and resource but the coal was useless
Again coal wasn’t useless, Gora didn’t design the system specific to Thar coal with low potential BTU output. Canada has oil in sand, guess what they design a system to process Tar sand and produce oil. Pakistanis scientists are waiting for Gora to do their job
 

Genghis khan1

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that pipeline you didn't go through with it you shoot yourself in the foot. it would have solved your energy problem in next 100 year
#1. IP pipeline is of strategic importance, but for that to happen Iran needs to stop being greedy and strike a bilateral price agreements not at the international market rates, and provide Iron clad guarantee not to F with oil supply regardless of Pakistan stance on Mideast politics.

2. Pakistani establishment needs to grow a pair to say F off to Saudis and US pressure for it’s strategic interest.
 

Hack-Hook

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#1. IP pipeline is of strategic importance, but for that to happen Iran needs to stop being greedy and strike a bilateral price agreements not at the international market rates, and provide Iron clad guarantee not to F with oil supply regardless of Pakistan stance on Mideast politics.
sorry but the pipeline was for gas not oil
and even at international rate , it was a lot cheaper to buy it from Iran than other sources as you didn't need to pay for transport. and the others also sold it at international price .
and excuse-me but after your behavior its you who must give us guaranty that by a word from the guy in white house you won't chicken away again, we built the pipeline to Pakistan border , how much of it on the other side of the border was built , even when we said we are ready to finance half the cost of building it on your border and if you have problem finding companies to build it on your side of the border we will build it .

about your stands in middle east , just use your brain for a second , we have a gas pipeline to turkey , we and them stand on two side of the conflict in Syria , they even directly attacked Syrian force and the militia we supported in Syria , they support Azerbaijan hegemonic aspiration and its wish to annex 3 of Iran province did we ever cut the flow of gas into turkey ? why you think you can do more to stand against us ?
 

aryobarzan

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sorry but the pipeline was for gas not oil
and even at international rate , it was a lot cheaper to buy it from Iran than other sources as you didn't need to pay for transport. and the others also sold it at international price .
and excuse-me but after your behavior its you who must give us guaranty that by a word from the guy in white house you won't chicken away again, we built the pipeline to Pakistan border , how much of it on the other side of the border was built , even when we said we are ready to finance half the cost of building it on your border and if you have problem finding companies to build it on your side of the border we will build it .

about your stands in middle east , just use your brain for a second , we have a gas pipeline to turkey , we and them stand on two side of the conflict in Syria , they even directly attacked Syrian force and the militia we supported in Syria , they support Azerbaijan hegemonic aspiration and its wish to annex 3 of Iran province did we ever cut the flow of gas into turkey ? why you think you can do more to stand against us ?
I would not be too harsh on Pakistan's stand with Iran . They have a $32 billion dollars remittance coming to them from Arab side of the Persian gulf,,,anything they do that will anger the Arabs will affect that source of Income....Buying Arab fuel is probably part of that equation even if it is 4-5 times more expensive (LNG is 4 to 5 times more expensive than piped gas) Turks do not have that issue with Iran.

Any economical engagement with Pakistan requires Iran and Arabs reaching a cold peace agreement.
 

Genghis khan1

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sorry but the pipeline was for gas not oil
and even at international rate , it was a lot cheaper to buy it from Iran than other sources as you didn't need to pay for transport. and the others also sold it at international price .
and excuse-me but after your behavior its you who must give us guaranty that by a word from the guy in white house you won't chicken away again, we built the pipeline to Pakistan border , how much of it on the other side of the border was built , even when we said we are ready to finance half the cost of building it on your border and if you have problem finding companies to build it on your side of the border we will build it .

about your stands in middle east , just use your brain for a second , we have a gas pipeline to turkey , we and them stand on two side of the conflict in Syria , they even directly attacked Syrian force and the militia we supported in Syria , they support Azerbaijan hegemonic aspiration and its wish to annex 3 of Iran province did we ever cut the flow of gas into turkey ? why you think you can do more to stand against us ?
Oil or gas regardless. I am talking about energy security in strategic focus. As far as price is concerned, Iran was recently off sanctions and was demanding higher prices. Govt minister was on TV to explain why they abandoned IP pipeline project. Iranian side weren’t willing to lower price. Qatari gave better deal. True there was no shipping cost but their was pipeline rent/cost in additional to gas price. I think Iranian side was trying to hook gas price to international Brent price.

Few years later Iranian were again under sanctions and willing to negotiate. Now question is how many hurdle Pakistan have to go through to pay Iranian. What cost Pakistan have to pay internationally in monetary terms alone if it import Iranian oil/gas. Is it even worth it give the discount Iranian are offering. Answer was simple No.
 

Genghis khan1

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Iranian like Saudis produce oil form $8 to $20 per bbl. which means 300% to 1000% (10x) profit depending on international oil prices. If Iran give Pakistan deal sweet enough, no matter what Saudis or US say, Pakistan would not have abandoned the deal regardless of sanctions.
 

aryobarzan

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Iranian like Saudis produce oil form $8 to $20 per bbl. which means 300% to 1000% (10x) profit depending on international oil prices. If Iran give Pakistan deal sweet enough, no matter what Saudis or US say, Pakistan would not have abandoned the deal regardless of sanctions.
I agree that Iran should give Pakistan enough discount to compensate for negative blowback that Pak will receive as a result...What that discount will be can be negociated by both sided...why this is not done actually is a good question..I think there is more to this than just economics..
 

Communism

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The reason is that Imran Khan was directly funded by the gulf states and western countries.


This means he would never do a deal for iran gas in a million years.


You can see the problem clearly, as any international observer could, when pakistan insisted on using LNG, the most expensive form of energy on the planet.


Qatar gave a sweetheart deal to pakistan, but now pakistan is stuck with massive amounts of lng infrastructure it cannot afford and also cannot afford to use at all, other than from the sweetheart deal.


Pakistan was also dumb, like the europeans, to think that since lng was cheap during the beginning of covid, it would be cheap forever.


This was also why Pakistan didn't do a greater percent of it's lng use in long term contracts, but did loose contracts instead with trading firms.


The europeans did the same stupid shit, and demanded that natural gas that russia sold to europe to be on spot prices and refused to renew their long term contracts.


Smarter countries knew better.
 

farok84

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and even at international rate , it was a lot cheaper to buy it from Iran than other sources as you didn't need to pay for transport. and the others also sold it at international price .

Hi,

Can you please do a comparison of landfall and end user's prices for Pakistan's exiting long-term Lng contracts vis-à-vis proposed gas through IP pipeline.

All Pakistan's Lng contracts (whether LT or Spot) are DES based, we are not paying on top for shipping and transport, it is included in the contract price.
 

Hack-Hook

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Hi,

Can you please do a comparison of landfall and end user's prices for Pakistan's exiting long-term Lng contracts vis-à-vis proposed gas through IP pipeline.

All Pakistan's Lng contracts (whether LT or Spot) are DES based, we are not paying on top for shipping and transport, it is included in the contract price.
your deal with qatar was 13.6% of brent oil , then you made another 11% of brent oil investment that didn't materialize according to mashreqnews we sell gas to Iraq at the price of 22cent/ cubic meter
right noew a study show we can offer gas at iran border to germany at the price of 300$/ 1000 cubic meter
 

farok84

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your deal with qatar was 13.6% of brent oil , then you made another 11% of brent oil investment that didn't materialize according to mashreqnews we sell gas to Iraq at the price of 22cent/ cubic meter
right noew a study show we can offer gas at iran border to germany at the price of 300$/ 1000 cubic meter
Hi,

Thanks for the reply.

Kindly go through the following posts to have better understanding related to Pakistan's existing Lng contracts and proposed gas price through IP.

Hi,

The GSPA (Gas Sale & Purchase Agreement) was signed between Iran and Pakistan. India backed out of the project in 2009 and didn't sign the GSPA.

"India quit the project in 2009, citing costs and security issues, a year after it signed a nuclear deal with Washington."


Iran did offer $500m loan for construction of Pakistan's portion but had later backed out.

"Pakistan in October asked Iran to shoulder the entire $2 billion cost of building the Pakistani part of the pipeline, but Iran declined. Iran had earlier assured Pakistan $500 million for the gas pipeline, but later backed out of that deal. "




Hi,

The price of Iranian Gas through Iran-Pakistan Pipeline after proposed amendments in earlier signed GSPA was around equivalent to 12% (1) of Brent. Iran did not sign this amendment and only gave verbal commitments. So, the earlier signed GSPA linked to JCC (Japan Crude Cocktail) still stands with price equivalent to 14.25% (2) -13.4% (3) of Brent. Even if they had signed the amended GSPA (at 12% Brent), the price was outrageous and made no sense (even in 2017) and was even higher than Pakistan Lng contracts with Eni and Gunvor (priced at 11.6247-12.14% & 11.6247%) (5), that were signed in 2016. Their signed offered price stands at equivalent to +13.4% Brent, even higher than Qatar (13.37% Brent) 2016 Lng contract. Our new Qatar contract is priced at 10.2% Brent (4).

(1) https://www.thenews.com.pk/amp/180093-Pakistan-in-talks-with-Iran-to-renegotiate-IP-project-GSPA

"Shahid Khaqan Abbasi, minister for petroleum and natural resources, told the upper house that the government has requested Iranian authorities to bring changes in the gas sale and purchase agreement (GSPA). The price of natural gas, under GSPA, was agreed at $12 per million metric British thermal unit (MMBtu), if crude oil price stood at $100/bbl in the international market."

(2) https://www.dawn.com/news/1238783

"Compared with the natural gas import options, the government claimed the delivery price at border under the Iran-Pakistan gas pipeline was $5.70 per MMBTU at $40 Brent price and that of Turkmenistan-Afghanistan-Pakistan-India was $5.90."

(3) https://www.oxfordenergy.org/wpcms/wp-content/uploads/2013/06/NG-77.pdf
Page 37 of 87 (or 30)

View attachment 794597

(4) http://www.ogra.org.pk/download/6761

View attachment 794605

(5) http://www.ogra.org.pk/download/6568

View attachment 794603


If you are interested, please read following for Eni, Gunvor and IP GSPAs.

Hi,

As much as I want that pipeline to be constructed, the pricing formula linked to JCC makes this gas totally unfeasible for Pakistan, specially when the world is moving to price LNG on gas-linked benchmarks (Henry Hub and TFF).

Current Price = (a x JCC) + b,

where,
a = 0.063 (6.3%), when JCC is between $30-70,
0.05 (5%), when JCC falls outside $30-70 range.

b (fixed component) = $1.15/mmbtu, when JCC is between $30-70,
$1.54/mmbtu, when JCC is below $30,
$2.06/mmbtu, when JCC is above $70.

It would be a sad day for Pakistan, if IK government moves forward with construction phase, without renegotiating a gas-linked pricing formula linked to HH, and reducing, preferably completely dropping this 'b' fixed component. Pakistan must not be bearing the operational cost of the Iranian portion of the pipeline, the same way Iran will not be shouldering operational cost for Pakistan's side of the pipeline. This fixed cost is totally unacceptable, and must go.

Although our LNG contracts are delivered ex ship (DES), and the cost of shipping and any other charges (insurance, etc) are covered by Sellers (Qatar, Eni or Gunvor), but for the sake of clarity, lets do a quick hypothetical comparison to the cost of transportation with Qatar's LNG.

Today's spot freight is priced at $160k, with 3 days travel time from Qatar to Port Qasim, and 5 day offloading time (regas at 630mmcfd rate at FSRU), the shipment cost comes out to be $0.3938/mmbtu. How can a fixed price of $1.15/mmbtu at Iran-Pak border justified?

The pipeline has lost its viability for Pakistan under current pricing formula. Iran needs to align the formula with the current market realities, if it wants to sell its gas to Pakistan.

Dear Niaz Sb,

Thanks for the kind reply, as always your inputs are highly appreciated and cherished. I will try to further expand on it.

I definitely agree LNG will always be costlier than any gas transported through pipeline either IP or TAP, due to number of add on charges, like you said of terminal charges, and on top of it Port charges, Custom Clearance charges, etc. The comparison shouldn't be with end-user prices but with the landfall prices at Pakistan borders, and the dollar amount we are paying to these suppliers. If we are going to consider add on cost for LNG, we should also consider operations & transmission charges incurred on ISGS, which will result in an added tariff.

The combined cost for regasification at our two terminals, if fully utilized for contracted capacity of 1200 mmcfd should come out to be ~$0.4291/mmbtu. The daily combined charges paid to these two is $ 515,000/ day. But since we are under utilizing PGPL, the actual cost varies with number of cargoes it is dealing on per month basis. For the term contracted 2 cargoes/ month of PLL that gets regasified there, cost will be ~$1.1538/mmbtu. For FSRU, we will be receiving 5 cargoes/month from now on against 6 which we were receiving till Dec, 2020, cost will be ~$0.4968/mmbtu against earlier ~$0.4141/mmbtu.

With the current formula including fixed amount, Iranian gas is cheaper than our LNG, which is due to lower JCC price owing to lesser import of crude oil volumes by Japan in 2020, this JCC will not remain cheap this or next year. Also in 2024, when this pipeline is supposed to be commissioned, the LNG market would have been totally changed. Term contracts have already started to use gas-linked benchmarks. The trend in term prices indexed with oil is a steady downward slope of 15 to 10.6% of Brent (from 2014 to 2020). With newer projects coming online, with more and more LNG volumes getting available in market, prices are bound to go down, and we might end up seeing LNG being price at 7-8% slope for term deals in 2023/ 2024 timeline. The viability of Iranian gas at 6.3% slope to JCC with a fixed component makes no economical sense in current and future market scenarios for Pakistan. Iran has to sweeten this deal in order for us to commit to this project. Mere $500 mil loan for construction of Pakistan's portion won't cut it.

The pricing formula is hard to find from open source. One article published in 2007 writes;

"The Iranian gas under the approved formula will translate into $3.67 per MMBTU when the JCC price is $40 per barrel of oil -- a rate least expected given current international prices. The gas price will be $4.3 per MMBTU at $50 per barrel and $4.93 per MMBTU at $60 per barrel.

The gas rate at the Pakistan border will rise to $5.56 per MMBTU when crude prices reach $70 per barrel. The tariff will further rise to $6.56 per MMBTU and $7.06 in case oil prices increase to $80 and $90 per barrel, respectively."




Says the GSPA it had signed and is not ready to renegotiate. If Iran agrees to sell at Henry Hub prices, I will be the first one to lobby for that.

View attachment 795995


View attachment 795997

View attachment 795998

View attachment 795999


Now, please prove me wrong by simply providing the contractual price of Iranian gas through Iran Pakistan Pipeline at landfall and the price to be charged to end consumer? Anyone who I have met supporting IP pipeline, have failed to do this simple task, which only requires few searches on google.




Again, NG is not marketed in International Markets like LNG or other commodities. The whole idea behind Lng stems from finding a secure and affordable way for NG transportation. I have already shared evidence, which you are not ready to accept.

Do you mind me asking, whether you work in Oil or Gas industry, specially upstream, production or transportation?



Does a news article from a reputable publication or a research paper by independent international and local experts on the subject count as sources?

If they do, then I have provided them all in earlier posts. Please go through them again.


Hi,

Apart from the links I shared earlier, this one quotes the Minister for Petroleum and Natural Gas at the time (2012). The slope translates (lazily) to 13% of Brent (when Brent was to be priced at 100/bbl). Our 2016 contract with Qatar stands at 13.37% of Brent and 2021 stands at 10.2%. (I have shared Ogra price summary in Post # 30)


“Iranian gas will cost $13 per mmbtu and Turkmen gas $11 per mmbtu, if the crude oil price is $100 per barrel,” the official said; adding that Pakistan will sign a Gas Sales Purchase Agreement (GSPA) with Turkmenistan in the upcoming May talks.




@Sainthood 101

Hi,

Adding to above quoted post (Post # 43) following should provide a better visualization for the additional pipeline required to bring I-P gas from Nawabshah onwards to consumers in Punjab (or it's tie into North - South or PSGP) and hence increasing further, the end consumer price.

View attachment 796785

Hi,

The loan was a meagre $500million for a $2Billion (now almost $3B) pipeline, which would have been paid by Pakistan to Iran by levelling a tariff on end consumer (usually 10% of contract price).

The gas Pakistan was supposed to have from Iran was 750mmscf/day. That is, at today's Brent price levels, contract price would have been $9.3936/mmbtu or $7.0452million daily paid by Pakistan to Iran plus a section of pipeline tariff to pay for that $500million loan. I don't understand how was this gas free for Pakistan?

Was Pakistan asking for another soft loan on rolling bases to pay for Iranian gas on top of this $500million (meant for construction), some kind of deferred payment mechanism similar to what we have with KSA, UAE and Qatar? Is that what you are referring to?

Regardless, in today's market conditions, IP is not feasible, unless a better price is renegotiated that reflects today's market and is based of Henry Hub or AECO (gas-linked benchmarks) contrary to oil-linked benchmarks. The gas was supposed to be delivered at Iran-Pakistan border, and hence the end user will have to pay for tariffs of two additional pipelines. 1) From Iran border to Gawader to Nawabshah or to Karachi and 2) From Karachi or Nawabshah to Kasur/ Lahore. These two pipelines are itself capital intensive and will cost atleast $5Billion combined. Pakistan does not have spare cash for such a project.

It made sense when India was the end-user, but without India, the whole project is not feasible. Zardari government should not have signed this GSPA in first place. Maybe in future, if China decides to import Iranian gas, through Pakistan, the project could be revived.



PPP (Zardari) government should not have signed this GSPA in first place. It is a disaster for Pakistan. Pakistan had prepared a force majeure detailing Pakistan's efforts for securing finances from several financial institutions like ADB and EXIM Bank of China, who all have backed out. The affair at International Courts would not have been so one sided. Regardless of the outcome of such litigation, it would have also blocked Iranian access to any Indian and Chinese market through Pakistani lands and seas. Nonetheless, Pakistan is and should be grateful to Iranians for deferring any international litigations and handling the affair bilaterally.

Hi,

And why was this ask so outrageous?

Firstly, Pakistan based EPC companies like Descon have all the technical expertise to handle such a project, specially when the diameter of pipeline was reduced from 56in to 42in. ISGS was struggling to raise funds for the project, and they asked Iran's help in raising those funds, they had and have all the expertise to operate the pipeline and manage the project independently.

Secondly, giving an IRGC linked engineering company unhindered access to the lengths and breadths of Pakistan, specially in Baluchistan, would have been a security disaster. It was a good decision by the government not to entertain any such demands from Iran.



Please see Post # 30.

I have tried to explain in great details, as to how the Iranian gas through IP was not cheap or even cheaper when compared to Pakistan's other contracts (whether Qatar, Eni, Gunvor Lng contracts or gas through TAPI). This myth, propagated by certain quarters and PPP in Pakistan, must be countered by Pakistan government.
 

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