Pak-Iran pipeline: KSE-100 index plumbs 441 points fearing sanctions

[KRAIT]

Yes, mind your own business, you are not Pakistani

Then what were you doing in Akhilesh Yadav thread ?

 

[A.Rafay]

KSE 100 will soon get back on track! It already gained 300 Points yesterday!

 

[Musalman]

I think US will play smart, they will not sanction now till 2014 but will wait for activities to start. It is my reading.

Pipe will be ready before US exit. I think both US and India will try the terrorism by killing the construction staff.

 

[notorious_eagle]

Will our factories be competitive internationally if we pay four to ten times the price for gas compared to others? Your point makes sense only if the price of supplied gas is reasonable according to prevailing market rates for gas, which are likely to fall, and not tied in to oil prices which are likely to rise.

Where are you getting these numbers from?

To effectively deal with the looming energy crisis Pakistan desperately needs to complete one of the three available options, according to officials: (i) IP, (ii) import of Liquefied Natural Gas (LNG) from Qatar; and (iii) through Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. The gas price under IP project would be $11 per Million British Thermal Unit (MMBTU), for TAPI $13 per MMBTU and Liquefied Natural Gas (LNG) at $18 per MMBTU.

IP pipeline project: Pakistan to pay $6/MMBTU more for gas price

Do you honestly believe that Pakistan will risk fearing all this backlash just to get ripped off by the Iranians. I have full faith that our strategic planners would have done there research and would have compared the Pros and Cons before engaging in this contract. Pakistan needs a secure and uninterrupted supply of gas to effectively fulfill its energy shortages, this pipeline effectively provides that. Besides, Pakistan's energy infrastructure is largely based on gas.

 

[Argus Panoptes]

Where are you getting these numbers from?

To effectively deal with the looming energy crisis Pakistan desperately needs to complete one of the three available options, according to officials: (i) IP, (ii) import of Liquefied Natural Gas (LNG) from Qatar; and (iii) through Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. The gas price under IP project would be $11 per Million British Thermal Unit (MMBTU), for TAPI $13 per MMBTU and Liquefied Natural Gas (LNG) at $18 per MMBTU.

IP pipeline project: Pakistan to pay $6/MMBTU more for gas price

Do you honestly believe that Pakistan will risk fearing all this backlash just to get ripped off by the Iranians. I have full faith that our strategic planners would have done there research and would have compared the Pros and Cons before engaging in this contract. Pakistan needs a secure and uninterrupted supply of gas to effectively fulfill its energy shortages, this pipeline effectively provides that. Besides, Pakistan's energy infrastructure is largely based on gas.

Do you have full faith in the politicians who inaugurated the project shortly before they leave government? Besides, I would to be proven wrong and see the project contribute positively to Pakistan's energy needs. However, I do not share your confidence and fear that we may be digging a hole for ourselves.

What can justify the rise in price of the gas from $5 to $11 per MBTU?

===========================

http://www.epw.in/system/files/pdf/2...s_Pipeline.pdf

5 Negotiations over Price
The pricing for natural gas supply from Iran, apart from security
concerns, has been a major sticking point in the IPI pipeline negotiations.
While the Iranian point of view was to align the natural
gas price to the price of LNG, India and Pakistan proposed a more
realistic approach that would keep the piped gas economical for
investment in the pipeline infrastructure. The volatility in the
crude oil price, which has scaled new peaks over the last couple
of years, took the leverage away from the buyers. From the Indian
point of view, transportation charge and transit fee are the additional
issues to be negotiated bilaterally with Pakistan.
The commercial interests from the three countries in the IPI
pipeline are being extended through three representative
agencies
– the National Iranian Gas Export Company (NIGEC),
Interstate Gas Systems Private and GAIL. Iran, India, Pakistan
have jointly appointed Gaffney, Cline and Associates (GCA), a UK
based consultant, to provide an independent professional view
on the appropriate price to be charged for the natural gas at the
point where the pipeline crosses the border between Iran and
Pakistan. A pricing methodology based on the netback from price
of LNG at Japan has been agreed upon by the three countries. The
GCA is to arrive at a price for natural gas after taking into account
transportation up to Iran-Pakistan border.
The GCA based its netback calculations on the following:
(a) cost of LNG in Japan; (b) LNG shipping cost from the Persian
gulf to Japan; (c) cost of gas liquefaction in Iran; (d) cost of gas
processing for LNG mode and pipeline mode; and (e) estimated
pipeline transportation cost from Assaluyeh to the Iran-Pakistan
border [Infraline 2007b].
During the fourth trilateral JWG meeting held at Tehran on
January 24-25, 2007, net back calculations and price derivation
done by GCA were discussed. In response to reservations by India
and Pakistan, Iran suggested a formula for gas price up to
Pakistan-
Iran border during the JWG meeting on February 22-23,
2007 in Islamabad. The agreed formula links the price of delivered
gas to the price of JCC. While Iran and Pakistan agreed to
the proposed formula subject to approval by the respective governments,
India agreed to respond to pricing formula with in four
weeks. The formula for the gas delivered at the Iran-Pakistan
border is as follows (ibid):
For JCC price less than $ 30/bbl
P = 1.54 + 0.05* JCC;
st JCC < 30
For JCC price in the range $ 30 – $ 70/bbl
P = 1.15 + 0.0633* JCC;
st 30 &#8804; JCC &#8804; 70
For JCC price greater than $ 70/bbl
P = 2.06 + 0.05* JCC;
st JCC > 70
where p denotes the price of delivered gas at Iran-Pakistan border
(in $ per MMBtu) and JCC – price of Japan custom cleared
crude (in $ per barrel).
At the prevailing JCC price of about $ 70/bbl, the natural gas
supplies at the Iran-Pakistan border would be $ 5.04/MMBtu.
Adding a normative transportation and tariff charge, the cost
insurance and freight price of the gas at the Indian border would
be approximately $ 5.84/MMBtu. The associated assumptions and
their reasonableness are further discussed in Section 7. This is
lower than the $ 7.17/MMBtu which Tehran sought in mid-2006
but higher than the Indian plan to peg the gas at $ 4.25/MMBtu.
The merits of the landed price of natural gas for India are examined
later in Section 7. The other two important issues, namely,
the transportation charges and transit fee to be paid to Pakistan
are discussed below.

 

[notorious_eagle]

Do you have full faith in the politicians who inaugurated the project shortly before they leave government? Besides, I would to be proven wrong and see the project contribute positively to Pakistan's energy needs. However, I do not share your confidence and fear that we may be digging a hole for ourselves.

I have no faith in our politicians, but rest be assured the only job the politicians have done is to put their signatures on the agreements. All the technical aspects of the project was finalized and negotiated by the technical folks, people whom specialize in this field.

I have full confidence in this project because there is a common consensus among all the stake holders in Pakistan whether the political, bureaucratic, business or the military that bold steps are needed to end this energy crisis. PPP is not signing this deal out of the goodness of her heart, but because the constant pressure it is receiving even from the landlords and the business men within her ranks to try and end this chronic energy shortage. It is due to this wide range consensus among all the stake holders of Pakistan that i am confident that this energy pipeline is in the best interests of Pakistan.

What can justify the rise in price of the gas from $5 to $11 per MBTU?

I don't know, i am not a petroleum engineer. But as i posted before, this pipeline provides the cheapest gas compared to all the other alternatives. If you have any other alternative solution, please be my guest and offer that solution which provides Pakistan with a secure and steady supply of gas which is reasonably priced. I am sure this gas is still cheaper compared to the diesel that we have to put in our generators just to light up our homes or run our factories.

 

[AZADPAKISTAN2009]

Having gas even slightly expensive is better then having NO GAS .. and promises of cookie from Uncle

 

[Marshmallow]

Pipe will be ready before US exit. I think both US and India will try the terrorism by killing the construction staff.

or a drone attack on da pipe?

 

[jha]

It should take at least two years to complete such massive work. By then if Americans manage to leave AFghanistan, Sanctions might hit Pakistan. However if the Gas starts coming before the Americans leave, it will be good for whole region.

Although Najam Sethi claimed in his program that Price is not fixed but is kept floating and will depend on the price of crude oil.
If this is true, then the price might be on higher side.

 

[somebozo]

Having gas even slightly expensive is better then having NO GAS .. and promises of cookie from Uncle

Iranian gas is one of the cheapest in the world and the sanction gives us the option to push them down further for more convenient payment terms or perhaps barter trade. However like I have said, the pipe line should bring Iranian gas not Iranian propoganda.
We need to distance ourselves form bother - Iran and GCC!

 

[Musalman]

or a drone attack on da pipe?

no that will be too obvious

 

[Hack-Hook]

or a drone attack on da pipe?

That pipeline is iran investment till Pakistan oay for it on the price of gas in several year .
Well I like to see who have the ball to pull out a drone attack on our property.

 

[Argus Panoptes]

I have no faith in our politicians, but rest be assured the only job the politicians have done is to put their signatures on the agreements. All the technical aspects of the project was finalized and negotiated by the technical folks, people whom specialize in this field.

I have full confidence in this project because there is a common consensus among all the stake holders in Pakistan whether the political, bureaucratic, business or the military that bold steps are needed to end this energy crisis. PPP is not signing this deal out of the goodness of her heart, but because the constant pressure it is receiving even from the landlords and the business men within her ranks to try and end this chronic energy shortage. It is due to this wide range consensus among all the stake holders of Pakistan that i am confident that this energy pipeline is in the best interests of Pakistan.



I don't know, i am not a petroleum engineer. But as i posted before, this pipeline provides the cheapest gas compared to all the other alternatives. If you have any other alternative solution, please be my guest and offer that solution which provides Pakistan with a secure and steady supply of gas which is reasonably priced. I am sure this gas is still cheaper compared to the diesel that we have to put in our generators just to light up our homes or run our factories.

It is good that all stakeholders are united behind this project, but the logic is similar to this: "We have an energy crisis. We must do something. The pipeline is something. Therefore we must build it." May I remind you how the rental power plants were going to be the answer to our electricity loadshedding?

My suggestions would be the following: 1. Ban CNG use in all vehicles, no exceptions. 2. Reduce theft of electricity. 3. Resolve circular debt by raising capital internally.

These three steps would alleviate the energy shortage as a stopgap measure.

For the longer term: 1. Build the damn hydroelectric power projects. 2. Build thermal power running off Thar coal, bad as it may be in quality. 3. Use Gwadar to import LPG/LNG from the Gulf.

 

[Marshmallow]

That pipeline is iran investment till Pakistan oay for it on the price of gas in several year .
Well I like to see who have the ball to pull out a drone attack on our property.

i also hope nothin like dat happens

 

[OrionHunter]

America's so called threat of sanctions against Pakistan is just an empty threat and nothing but plain rhetoric! It's a good thing that Pakistan has thumbed its nose at the Yanks!

The Americans seem to forget that they have to use Pakistan territory to withdraw from Afghanistan. The moment sanctions are clamped, Pakistan will likely close the gates at Torkham which would leave the Yanks holding the can!

So don't expect any sanctions till Dec 2014!