Ignoring Washingtons pressure on IP project
Pak to finalise import offer of 80,000 barrels of crude oil
* Minister for petroleum and natural resources says high-level delegation led by him will leave for Tehran in the second week of March to materialise offer by Iran
By Zeeshan Javaid
ISLAMABAD: Brushing aside the gigantic pressure from Washington to abandon trade agreements between Pakistan and Iran, particularly the billion-dollar Iran Pakistan (IP) gas pipeline project costing $1.25 billion, Islamabad has decided to finalise the offer to import 80,000 barrels of crude oil from Iran till end of March.
Talking to reporters at the Oil and Gas Development Company (OGDC) secretariat, Minister for Petroleum and Natural Resources Dr Asim Hussain said that a high-level delegation led by him would leave for Tehran in the second week of March to materialise the offer by Iran to import 80,000 barrels crude oil per day.
He said that the Ministry of Petroleum and Natural Resources will also open a tender next week to invite companies for construction of infrastructure of IP gas pipeline project in Pakistani territory, adding that Tehran offered financing of $250 million, however Islamabad has been seeking its double $500 million to lay a pipeline for transporting fuel.
Hussain further maintained that Iran was ready for three months deferred facility but added that it should be forward-looking otherwise the disparity between the rupee and dollar could hurt us. He said discussion was coming on with the State Bank of Pakistan to fine-tune the proposal.
Because of severe disagreements between US and Iran, Washington has expressed its serious concerns over the IP project and is forcing Pakistan to abandon this project and shift interests from IP to TAPI project. US team offered Pakistani energy managers financial assistance to work on TAPI project as an alternate to IP pipeline as well as construction of liquefied natural gas (LNG) terminals during the fourth round of energy dialogue held in Islamabad as dated September 15.
Islamabad and Tehran inked the Gas Sales Purchase Agreement (GSPA) of IP gas pipeline project during June 2009 within certain terms and conditions including that Pakistan would pay 78 percent of crude oil parity price to Iran after mutual consensus of both countries.
One important thing is that Iran has completed more than 90 percent construction work on the pipeline infrastructure from their side and Pakistan should start the infrastructure development on priority basis, which unfortunately could not be observed.
While reviewing the following differences between two mega imported energy resources IP and TAPI, he maintained that the actual cost of TAPI was announced at $3.2 billion, which was later on shot up to $7.6 billion because of long delay in materialisation due to the ongoing war on terror in Afghanistan, while the cost of IP gas pipeline was at $1.25 billion, which is four times cheaper than the trans-afghan project.
Controlling the law and order situation and arrangement of security infrastructure is much easier on the pipeline network of IP as it would pass through Khuzdar district of Balochistan province and Karachi in Sindh, while the main pipeline will continue towards Multan, and in case of TAPI more security risk is involved due to continued war between Afghanistan and west.
About the LNG imports from Qatar, the petroleum minister said that the terms from Doha have been received. He said they have indicated an initial price of $15 to 16 mmbtu, which will be considered by the government and after due diligence counter offer would be made. Hussain added that Qatar has agreed to provide 3.5 million tonnes of LNG for 15-year period. He said that Qatar has also clarified that they would be carrying out due diligence of private parties interested to import LNG from Qatar to Pakistan.
He further maintained that the Petroleum Ministry was working on a new refining policy to increase their refining capacity. He said incentives would be provided to attract more investment in the sector. He said that the new policy would make it mandatory for the refineries to have at least one hydro cracker.
Daily Times - Leading News Resource of Pakistan
