ISLAMABAD (January 16 2009): Iran has scaled down its earlier demand to link the price of gas from 85 percent to 78 percent of crude oil price under the still to be approved Iran-Pakistan-India (IPI) gas pipeline deal. The steering committee on IPI gas pipeline project, which is a sub-committee of the Economic Co-ordination Committee (ECC) of the Cabinet, was informed that it had decided to recommend to the Cabinet to show greater flexibility on the gas price on offer by Iran.
The steering committee on IPI held its eighth meeting, chaired by Advisor to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain here to review the current status of the project. The steering committee reviewed the current status on IPI gas pipeline project, and decided to further negotiate with Iran the clauses related to gas price.
The committee, however, took positive note of the deliberations held so far between Pakistan and Iran on the project. The steering committees recommendations will be placed before the Cabinet for approval. Advisor to the Prime Minister on Finance Shaukat Tarin, Chief Minister of Balochistan Aslam Raisani, Special Assistant to the Prime Minister on Finance, Economic affairs and statistics Hina Rabbani Khar, Petroleum Secretary Mehmood Saleem Mehmood, Managing Director of ISGS Hassan Nawab Khan and other officials attended the meeting.
Sources revealed to the Business Recorder on Thursday that Tehran had shown more flexibility on the gas price as the meeting was informed that Iran had now placed a request to link the gas price to 78 percent of crude oil price. Earlier during the bilateral talks on IPI held in Tehran on December 29-30, 2008, Iran sought linking the gas price to 85 percent of crude oil price.
Pakistan had offered to link gas price to 60 percent of crude oil price. Sources said that the steering committee decided to present the fresh demand of Iran to link the gas price to 78 percent of crude oil price before the Cabinet for guidelines to resume the talks on IPI. The meeting observed that the country would generate 5000 MW electricity from one billion cubic feet gas per day (bcfd) imported from Iran.
It was noted that thermal power plants required gas to generate power. The current power shortfall is 3000 MW that would rise to 10,000 MW per day by 2020. Sources said that the committee noticed that the country was also facing 700 million cubic feet per day shortfall that would shoot up to two billion cubic feet per day by 2010. It also reviewed the electricity, generated from solar and wind project, was costlier than electricity generated from thermal plants to be operated on imported gas from Iran.
Addressing the meeting, Advisor to Prime Minister on Finance Shaukat Tarin said that economy of the country would have the capacity to consume more gas in the near future.
He said that the industrial units were facing gas shortfall that was causing reduction in the production. He said that industry required energy and gas on an emergent basis, which must be imported from Iran to bridge the gap between the demand and energy deficit.
Special Assistant to the Prime Minister on Finance, Economic Affairs and Statistics Hina Rabbani Khar said that it was time to make a final decision on the IPI gas pipeline project, and added that there should be no more delay on the deal with Iran.
The IPI project will have a 2,775-kilometre-long pipeline to carry Iran's natural gas to Pakistan and India. The project, estimated to be completed in three to five years time, is expected to benefit energy-starved Pakistan. The pipeline would be supplied from South Pars field. The construction operation was to start in 2009 and the pipeline was expected to be completed in 2013, the committee was told.
Who is gonna invest in Astan. Plus I think its only we Pakistani who basically repair gas line with 24 hours. I can bet no one in the world can do that, given the situation that you are welding a line and missiles are flying over you.
