ECC approves IPI gas pricing formula
By Khalid Mustafa
ISLAMABAD: The first gas delivery of 2.1 billion cubic feet per day at the Pak-Iran border would be materialised in 2012, Petroleum and Natural Resources Secretary Ahmad Waqar said on Tuesday.
Accompanied by Dr Ashfaq H Khan, adviser to the Finance and Revenue Ministry, Waqar was addressing a press briefing after an Economic Coordination Committee (ECC) meeting. He said the transit fee, which Pakistan would get from Iran, would be decided in accordance with the best practices in the world.
The ECC meeting, chaired by Prime Minister Shuakat Aziz, approved in principle the gas-pricing formula, linking it to the price of Japan crude cocktail under the $7.2 billion IPI gas line project at the Pak-Iran border. After the IPI pipeline project started taking shape Pakistan and Iran have agreed on the gas pricing formula, which the ECC approved in principle.
Waqar said the Petroleum and Natural Resources Ministry would again move the ECC on the gas pricing formula issue for formal approval after getting the input from India. He said India would formally confirm the acceptance of gas-pricing formula after reaching an understanding on the transportation cost and the transit fee for the pipeline traversing Pakistan.
Waqar said the ECC also approved sharing of Iranian gas of 2.1 billion cubic feet per day equally between Pakistan and India in the Phase 1 of the IPI project. In the Phase-II, 5.3 billion cubic feet gas per day would be imported, out of which India would purchase 3.2 bcfd gas and Pakistan 2.1 bcfd. “The meeting also approved the IPI project that would be materialised on segmented approach.”
He said under the segmented approach, Tehran would lay the pipeline from Paras gas field to Pak-Iran order and Islamabad would lay pipeline from Iranian to Indian border. “The gas would be imported from the Paras gas field, which has 944 trillion cubic feet gas reserves — the second largest after Russia’s gas field. The Paras reserves are enough for the usage of next 50 years if the gas of 40 bcfd is utilised.”
Waqar said under the segmented approach Tehran has started laying pipeline from Paras field to Pakistan border as Iran also wants to provide gas to the population in its part near Pakistan border. He said the route, structure and cost of the pipeline between Iranian and Indian borders is yet to be decided. However, he added, the cost of laying the pipeline within the Pakistani territory has been estimated at around $3 billion.
Two routes of the pipeline are under consideration under which it would be having two lengths 7,500 km and 1,050 km, Waqar said, adding that the exact length and the cost would be decided after the route was finalised. “Pakistan will carry out the techno-economic feasibility of the project structure to be laid in its territory and to this effect an international consultant would be appointed.”
Responding to a question, he said in case India does not join the project, Iran and Pakistan would bilaterally materialise the project. Waqar said the ECC also allowed the steering committee to review the project. The committee will be headed by the petroleum and natural resources minister, and include the adviser to the prime minister on finance and revenue, the adviser to the prime minister on energy, the Planning Commission deputy chairman, the CBR chairman, the finance secretary and the petroleum and natural resources secretary.
He said the issues including transportation cost; transit fee; joint declaration; inter-governmental agreement; gas sales and purchase agreement, project structure; appointment of a project coordinator and the project feasibility study would be resolved by June. The ECC would also approve to transit fee and transportation cost after working out in consultation with India.
He said prior to the ECC, the steering committee would first review the transposition, transit fee and other issues.
He said the ECC meeting also approved the increase of intervention price of gram by Rs 100 from Rs 750 per 40 kg in July 2006 to Rs 850 per 40 kg and Passco to this effect has been asked to procure 200,000 tones of gram from the 2006-07 crop at Rs 850 per 40 kg to use it as buffer stock.
He said increase in intervention price would stabilise the gram prices, which have increased because of less productivity. He said the domestic consumption of gram ranges between 550,000 to 600,000 tones. The ECC also noticed that the foreign reserves have jacked up to $13.61 billion, the highest in the country’s history, owing to which the exchange rate is stable.
The News.
http://thenews.jang.com.pk/top_story_detail.asp?Id=7059
