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Pak-Iran gas project

WebMaster, why create a new thread for this , there are several threads that discuss this project?

Anyone have pricing terms for this? Since you are likely dealing with Gazzzprom as the investor and contractor you best check the fine print.

I can't remember exactly but the price is not fixed. The government decided about 76-80% of the current Crude Oil/barrel price and if Iran offers cheaper Gas to any third country that same price will apply to this project also. Now i can't remember any further details but Shaukat Tareen said that on TV.

If the price of Crude oil goes UP/Down, it will effect the prices of this project also...............
 
I can't remember exactly but the price is not fixed. The government decided about 76-80% of the current Crude Oil/barrel price and if Iran offers cheaper Gas to any third country that same price will apply to this project also. Now i can't remember any further details but Shaukat Tareen said that on TV.

If the price of Crude oil goes UP/Down, it will effect the prices of this project also...............

Are you sure? Strange :what: gas price linked to Oil?

The Russians are pushing this quite hard to keep Iranian gas out of Europe. After the Ukraine incident the Europeans are uneasy about their dependence on Gazzzprom and are looking to hedge the risk by exploring alternate sources including Iranian gas via a Caspian pipeline.
 
Are you sure? Strange :what: gas price linked to Oil?

The Russians are pushing this quite hard to keep Iranian gas out of Europe. After the Ukraine incident the Europeans are uneasy about their dependence on Gazzzprom and are looking to hedge the risk by exploring alternate sources including Iranian gas via a Caspian pipeline.

oh well i am 100% sure about the relationship of Gas with Oil. It is very similar to Gold vs Silver. Both pairs are usually effected together and i can remember the statement of Shaukat Tareen saying if the crude oil stays around 75 dollars per barrel we will generate about 20%~ cheaper electricity comparing to the electricity we are currently generating from existing fossil energy plants in Pakistan and i remember another statement in which he said since past 2 years or so we have been arguing with Iran to provide us Gas for about 76% of the price of crude oil but they are insisting 80% and later on i heard the contract was signed at 80% during Zadari's visit of Tehran but then after couple of months i read in the newspaper saying 78% :confused:

Whatever the figures are.......... i am 100% sure the price is between 76% - 80% of the crude oil.
 
Pakistan to India: Will ensure safety of IPI pipeline

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Seeking to coerce India to join long- talked gas pipeline, Pakistan said on Thursday it will guarantee safety of the Iran-Pakistan-India pipeline and may give New Delhi [ Images ] an equity stake in the section passing through its territory as additional surety of safe delivery of the fuel.

With New Delhi boycotting formal talks for almost three years, Iran and Pakistan this month signed last of a series of agreements for implementing the project on bilateral basis.

Islamabad [ Images ] insists the agreements have 'in-built' mechanism to accommodate India should it decide to join the project.

"We (the State of Pakistan) will stand guarantee for safe delivery of gas (at Pakistan-India border)," Mohammed Chaudhry Ejaz, additional secretary in Pakistan's ministry of petroleum and natural Resources, told PTI in an interview.

Of the 1,035-km length of the pipeline in Pakistan, only 100-odd km would be exclusively for carrying gas to India while the rest would be transporting fuel for both Pakistan and India.

"We have up to nine hours of power outages and we need Iranian gas to bridge this rising deficit. It is in our interest that the pipeline is safe and we get the gas to generate power and fuel industries," he said.

India was widely believed to have decided not to pursue the project after the 26/11 terror attacks in Mumbai with apprehensions being expressed about terrorists holding the pipeline hostage to their demands and even cutting supplies by blowing the pipeline to hurt the interest of world's second fastest growing economy.

New Delhi, however, has not officially called it quits yet and is proposing talks with Iran to sort out impediments.

It wants to take custody of gas, that triggers payments for the fuel, only at Pakistan-India border to make Iran explicitly responsible for safe passage of gas through Pakistan.

Also, it wants gas utility GAIL (India) to take a stake in the 1,035-km pipeline section in Pakistan to make the project bankable, reduce the financing cost, ensure timely execution and ensure transparent and efficient management of the operations.

"Yes, we will more than welcome India to join the project length in Pakistan," Ejaz said when asked if Islamabad was open to India taking stake.

He said Pakistan in July 2009 signed a Gas Sale and Purchase Agreement and this month signed among other pacts a Gas Transportation Agreement, which has been notorised in Paris, provides for internationally acceptable transit arrangement for gas to be supplied to India.

"The agreements can be legally enforceable in any international court of law. The transit agreement makes us liable for safe supply of gas. We stand 100 per cent committed to safely supplying gas to India," Ejaz said.

Iran, in the GSPA, has committed to selling gas either from one of the phases of the giant South Pars offshore field or divert fuel it may import from one of its gas-rich neighbouring country.

Ejaz said like India, Pakistan has a growing energy deficit.

Pakistan faces a gas shortfall of 10.34 billion cubic feet per day (bcfd) by 2015. The indigenous gas supply is projected to fall to 2.16 billion cubic feet per day from current day supply of 4.3 bcfd. The demand for gas would stand at 12.5 bcfd by 2015.

Iran plans to export 2.2 bcfd of gas through the proposed pipeline, of which Pakistan's share would be 1.05 bcfd.

If India does not participate, Pakistan had planned to consume the entire volumes. The official said Iran has laid a large 56-inch line from Persian Gulf coast to Iran-Pakistan border with a view to accommodate supplies to both Pakistan and India.

"Considering Iran's internal consumption, they did not need such a big pipeline." Ejaz said according to pricing agreement between Iran and Pakistan, the gas will cost $7 per million British thermal unit if the crude oil price was $50 per barrel, $9.4 and $13 per mmBtu at oil rate of $70 and $100 per barrel respectively.

The estimated cost of the project was USD 1.2 billion inside Pakistan from its point of entry in Balochistan up to Nawabshah, the hub of the country's gas pipeline system. New Delhi has so far downplayed the agreements, officially only saying that it had price and security concerns which need to be addressed before it can join the project.

But, it may be preparing ground to formally quit the project. India's ties with Pakistan have dipped after Islamabad failed to act against culprits of 26/11 Mumbai terror attacks [ Images ].

It sees a serious terrorist threat to the pipeline particularly in Baluchistan province, home to a militant Islamist separatist movement.

Instead, New Delhi wants to buy gas in its liquid form that can be shipped or through a deep-sea pipeline avoiding the Pakistani territory totally.

Under the Iran-Pakistan-India pipeline proposal, a 1,100-km pipeline from the South Pars gas fields in the Persian Gulf was to be laid by Iranian firms to Iran-Pakistan border.

A 1,035-km pipeline was proposed in Pakistan to connect to the gas grid in Pakistan as also carry India's share to Pakistan-India border.

The pipeline has been on the drawing board since the mid-1990s, when Iran and India inked preliminary agreements to transport gas through Pakistan.

It was dubbed the 'peace pipeline' because of hopes it would lead to a detente between neighbours India and Pakistan.

India had major disagreements with Iran on pricing and project structure of the IPI pipeline when it broke out of talks in 2007.

Tehran has been insisting that ownership of gas would be transferred at Iran-Pakistan border while New Delhi wants it to be Pakistan-India border thereby making Iran explicitly responsible for safe delivery of gas. New Delhi is also upset with Iran's frequent changes in gas price.

Iran had originally priced its gas at $3.2 per mBtu but later in 2007 revised the rates to $4.93 per mBtu at $60 a barrel crude oil prices, which was accepted by India.

Last year, it again revised it and according to the new pricing formula, the fuel will cost New Delhi $8.3 at $60 per barrel oil price at Iran-Pakistan border.

Added to this would be a minimum of $1.1-1.2 per mmBtu towards transportation cost and transit fee that India would have to pay for wheeling the gas through Pakistan, making it the most expensive fuel in the country, they said.

Sources said Iran was not willing to commit to a supply-or-pay regime wherein it would have been held accountable for non-delivery of gas at Indian border.

It, however, wants New Delhi to commit to a strict take-or-pay clause wherein India would have to pay even if it does not take deliveries.

All it now says is that if Pakistan were to disrupt supplies to India, Iran will make a proportionate cut in the quantities to be delivered to Islamabad.

http://business.rediff.com/report/2010/apr/01/pakistan-to-india-will-ensure-safety-of-ipi-pipeline.htm
 
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Just think how many great opportunities and economic benifits are sacrficed due to this 'terrorism' which benifits none.

I wish, india and pakistan get forced to see econmic advanatages whcih diirectly benifits the common man of the two nations.

It will be a great start ... U have to..either today or tomorrow.
 
Just think how many great opportunities and economic benifits are sacrficed due to this 'terrorism' which benifits none.

I wish, india and pakistan get forced to see econmic advanatages whcih diirectly benifits the common man of the two nations.

It will be a great start ... U have to..either today or tomorrow.


I'll agree.

The fact that India and Pakistan are both countries with industrializing economies and as the standard of living increases for both middle-class and common man, the energy requirement is bound to go up in the next decade. Cheap gas from Iran will ensure we run our industries and power plants and keep our economy out of the dark that created the very terrorism we together face. I really don't understand why India is not so eager to support the IPI project, even though i see India, being a much larger consumer of energy as the most to benefit from such a deal.

Yes, the possibility remains of sabotage, and war when Pakistan can curtail gas supply, but then why not start on the peace process so that there never be the need to do so.

Imagine, cheap and easily available fuel Gas for our cars, buses,homes, industries (textile mills) and power plants.

Too bad the politicians on both sides of the Border are just making one simple task overly complicated.
 
news.outlookindia.com | Pakistan to India: Will Ensure Safety of IPI Pipeline

Seeking to coerce India to join long- talked gas pipeline, Pakistan today said it will guarantee safety of the Iran-Pakistan-India pipeline and may give New Delhi an equity stake in the section passing through its territory as additional surety of safe delivery of the fuel.

With New Delhi boycotting formal talks for almost three- years, Iran and Pakistan this month signed last of a series of agreements for implementing the project on bilateral basis. Islamabad insists the agreements have "in-built" mechanism to accommodate India should it decide to join the project.

"We (the State of Pakistan) will stand guarantee for safe delivery of gas (at Pakistan-India border)," Mohammed Chaudhry Ejaz, Additional Secretary in Pakistan´s Ministry of Petroleum and Natural Resources, told PTI in an interview here.

Of the 1,035-km length of the pipeline in Pakistan, only 100-odd km would be exclusively for carrying gas to India while the rest would be transporting fuel for both Pakistan and India.

"We have up to nine hours of power outages and we need Iranian gas to bridge this rising deficit. It is in our interest that the pipeline is safe and we get the gas to generate power and fuel industries," he said.

India was widely believed to have decided not to pursue the project after the 26/11 terror attacks in Mumbai with apprehensions being expressed about terrorists holding the pipeline hostage to their demands and even cutting supplies by blowing the pipeline to hurt the interest of world's second fastest growing economy.

New Delhi, however, has not officially called it quits yet and is proposing talks with Iran to sort out impediments. It wants to take custody of gas, that triggers payments for the fuel, only at Pakistan-India border to make Iran explicitly responsible for safe passage of gas through Pakistan.

Also, it wants gas utility GAIL (India) to take a stake in the 1,035-km pipeline section in Pakistan to make the project bankable, reduce the financing cost, ensure timely execution and ensure transparent and efficient management of the operations.

"Yes, we will more than welcome India to join the project length in Pakistan," Ejaz said when asked if Islamabad was open to India taking stake.

He said Pakistan in July 2009 signed a Gas Sale and Purchase Agreement and this month signed among other pacts a Gas Transportation Agreement, which has been notorised in Paris, provides for internationally acceptable transit arrangement for gas to be supplied to India.

"The agreements can be legally enforceable in any international court of law. The transit agreement makes us liable for safe supply of gas. We stand 100 per cent committed to safely supplying gas to India," Ejaz said.

Iran, in the GSPA, has committed to selling gas either from one of the phases of the giant South Pars offshore field or divert fuel it may import from one of its gas-rich neighbouring country.

Ejaz said like India, Pakistan has a growing energy deficit. Pakistan faces a gas shortfall of 10.34 billion cubic feet per day (bcfd) by 2015. The indigenous gas supply is projected to fall to 2.16 billion cubic feet per day from current day supply of 4.3 bcfd. The demand for gas would stand at 12.5 bcfd by 2015.

Iran plans to export 2.2 bcfd of gas through the proposed pipeline, of which Pakistan's share would be 1.05 bcfd. If India does not participate, Pakistan had planned to consume the entire volumes.

The official said Iran has laid a large 56-inch line from Persian Gulf coast to Iran-Pakistan border with a view to accommodate supplies to both Pakistan and India. "Considering Iran's internal consumption, they did not need such a big pipeline."

Ejaz said according to pricing agreement between Iran and Pakistan, the gas will cost USD 7 per million British thermal unit if the crude oil price was USD 50 per barrel, USD 9.4 and USD 13 per mmBtu at oil rate of USD 70 and USD 100 per barrel respectively.

The estimated cost of the project was USD 1.2 billion inside Pakistan from its point of entry in Balochistan up to Nawabshah, the hub of the country's gas pipeline system. New Delhi has so far downplayed the agreements, officially only saying that it had price and security concerns which need to be addressed before it can join the project.

But, it may be preparing ground to formally quit the project. India's ties with Pakistan have dipped after Islamabad failed to act against culprits of 26/11 Mumbai terror attacks. It sees a serious terrorist threat to the pipeline particularly in Baluchistan province, home to a militant Islamist separatist movement.

Instead, New Delhi wants to buy gas in its liquid form (LNG) that can be shipped or through a deep-sea pipeline avoiding the Pakistani territory totally.

Under the Iran-Pakistan-India pipeline proposal, a 1,100-km pipeline from the South Pars gas fields in the Persian Gulf was to be laid by Iranian firms to Iran-Pakistan border. A 1,035-km pipeline was proposed in Pakistan to connect to the gas grid in Pakistan as also carry India's share to Pakistan-India border.
 
^^^Looks like since China has dropped the pipeline financing, Pakistan is keen to get India back on board. The interesting part is joint stake in the pipeline laying venture which would possibly mean Indians working in sensitive regions like Balochistan or other areas were the pipeline is being laid.
 
well to be honest ill be happy if india joins along with china. but india has already wasted enough of our time. we are facing a crisis lik situation and any further delay will not serve us any gud. hope gud sense prevails amongst all countries and this pipeline bring all in this region together.
 
Don't do deals with Iran: US to India, Pakistan

IANS, Apr 2, 2010, 10.59am IST

WASHINGTON: The United States is "encouraging" India and Pakistan to not conduct transactions like their gas pipeline with Iran at a time when it's engaged in sensitive negotiations with Tehran over its nuclear programme.

The US "has encouraged our friends in the government of Pakistan to try to seek alternatives," assistant secretary of state for South and Central Asian affairs Robert Blake said on Thursday in a briefing about his recent trip to India, Afghanistan and Pakistan.

Asked if the issue of Pakistan signing a contract with Iran about a gas pipeline had come up for discussion in Islamabad, Blake said he had told Pakistanis that "people have been talking about this pipeline for a long time, but I think there continue to be many challenges, and to actually building the pipeline."

"So nonetheless we have encouraged our friends in the government of Pakistan to try to seek alternatives," Blake said noting, "Our concerns about the government of Iran are very well known."

"And given its current unwillingness to address its international obligations and international concerns about its nuclear programme, we don't think that this is the time for such transactions to be taking place with Iran."

Same goes for India, he said when asked to comment on India planning to resume talks with Tehran on the Iran-Pakistan-India pipeline after three years.

"This is a very sensitive time in negotiations with Iran, and we would prefer that all countries not conduct such transactions with Iran at this time,for the reasons that I already outlined," Blake added.
 
^^^Looks like since China has dropped the pipeline financing, Pakistan is keen to get India back on board. The interesting part is joint stake in the pipeline laying venture which would possibly mean Indians working in sensitive regions like Balochistan or other areas were the pipeline is being laid.

well you probably ignored the news of China wants to invest 2.5 billion dollars in IP gas pipeline? the thread is here in the same Economy section of this forum.
 
NBP, OGDCL refuse to be part of IP pipeline project

ISLAMABAD: The National Bank of Pakistan (NBP) and Oil and Gas Development Company Limited (OGDCL) have refused to become a part of Iran-Pakistan Gas Pipeline Project due to looming fear that United Nations (UN) may impose economic sanctions on Iran.

NBP, OGDCL refuse to be part of IP pipeline project
 
yup the project is dead primarily due to fear of sanctions, more importantly due to over pricing by iran
 
there is not any place called "Gulf region" South Pars" is in Persian Gulf", please use a correct name for that.
can I call Pakistan as par of India if so, then you can use Gulf for " Persian Gulf".
if you dont respect others properties can you expect respect from others?
For us Pakistanis it is Persian Gulf even if we call it Gulf. :-) No one in Pakistan call it Gulf because of the Arabian Gulf stupidity by the Persian Gulf Arab countries :)

---------- Post added at 11:06 AM ---------- Previous post was at 11:04 AM ----------

For the people who think that Pipeline can not be financed by Pakistan, please note that GOP has imposed a per mmbtu levy on all gas bills and in a year or two enough money will be generated to finance this project :)
 
Report: Pipe dreams by Ali K Chishti

Gas shortage-Pipe dreams By Ali K Chishti

Pakistan is facing the worst energy crises in its history. The country depends largely on natural gas for its energy needs, and as its domestic reserves dwindle, fuel costs are rising, electricity shortage increasing, and businesses are shutting down.

The only hope is a controversial multi-billion dollar import deal with Iran. The "peace pipeline" project for the import of 21.5 million cubic meters of Iranian gas a day was signed in June 2010. The pipeline was initially planned to go all the way to India, but New Delhi left the project after disagreements with Islamabad over issues of terrorism and tariffs.

Despite international pressure on Pakistan over trade with Iran, the project is being pursued with support from an invisible partner. "The Chinese are using their influence in Pakistan and Iran and are financing the $1.2 billion Iran-Pakistan gas pipeline through their largest bank, the Industrial and Commercial Bank of China," said Dean I Patric, an American energy expert who lives in Dubai. He said China also wanted a rail link between the two countries.

Iranian expert Prof Amir Madani said the pipeline could be extended to China and India, helping Pakistan meet its energy needs and collect royalties. But the real importance of the project was its ability to change the geopolitical situation in the region, he added.

"If Iranian energy goes to China and India, it will create a new, dominant pole in the world economy," he said. "The project is based on collaboration among Iran, Pakistan, India and China, and excludes the US and Saudi Arabia. That is why the US is doing all it can to stop it."

According to the proposal, the pipeline will begin from Iran's Assalouyeh Energy Zone in the south and stretch over 1,100km through Iran, entering Pakistan and passing through Baluchistan to Sindh. But officials say the route may change if China is interested in the project.

Pakistan's minister for oil and natural resources told the Senate recently that the pipeline would finish by the end of 2013, a year ahead of schedule.

"Pakistan wants to work on the project despite American pressure," a close aide of the president told The Friday Times.

But Lawrence Alan Levine, who has worked as a military adviser in the region, denied there was any pressure from the US. The recent sanctions "seek to encourage the Iranian state to comply with internationally recognized prohibitions on the proliferation of nuclear weapons and technology", he said. But "there is great opportunity for economic growth and development in the region, which can benefit many nations and people, and help bring peace and stability to the region. Many in the US would like to see Iran as a peaceful and progressive partner for peace."

Indian policy expert and political commentator Desh Kapoor said New Delhi had been competing with Beijing for resources around the world. "The Iran-Pakistan pipeline is something that has lots of risks for India, but India should have still gone ahead with it without making it central to its energy policy," Kapoor said. "Keeping out of it - however risky the project was - will not allow India to engage with either Iran or Pakistan in the energy sector."

Whether Pakistan will able to deal with international and regional conflicts to go ahead with the project is yet to be seen. But with increasing terrorism inside the country and the instability in Balochistan, local experts believe it is a dream that may not come true.

Ali Chishti is a TFT reporter based in Karachi. He can be reached at akchishti@hotmail.com
 

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