PAKISTAN: Pakistan's petroleum secretary says India, Pakistan to equally share Iranian gas

Energy officials of India and Pakistan said that they agreed to equally share 2.1 billion cubic feet per day of natural gas they plan to import from Iran. Pakistan and India agreed on Friday (February 23) to equally share 1 billion cubic feet per day of natural gas they were to import from Iran through a trans-regional $7 billion gas pipeline. Energy officials of the two countries also agreed on the transportation tariff for the pipeline that will link the world's second largest gas reserves in Iran with India through Pakistani territory. "The meeting was held in a positive frame of mind and with the main purpose of moving this project forward," said Ahmed Waqar, Pakistan's secretary, petroleum and natural resources, while talking to reporters with his Indian counterpart M. S. Srinivasan. The two sides hoped to complete all documentation for the project by June 2007, when they are expected to sign trilateral gas pricing agreement with Iran. "The other issue which was discussed was the transportation cost and the principle involved in formulation of the cost. We agreed with India, (Indian side) agreed with the basic principles which would be involved in formulation of transportation cost. However, the final tariff was also agreed based on the actual inputs," Ahmed said. Decades-old hostility between the two nuclear-armed South Asian rivals, and more recently pricing issues, had been major obstacles in the way of the project, which was originally conceived more than a decade ago. Under the agreed gas volume sharing formula, Pakistan and India will equally share 2. 1 billion cubic feet of gas per day to be available on the Pak-Iran border around 2010 in the first phase. The ultimate gas requirement had been estimated at 2.1 billion cubic feet for Pakistan and 3.2 billion cubic feet per day for India. The final transportation tariff would base on technical and financial inputs, like length and size of the pipe and the rate of return. The two sides will meet again in March to decide on a transit fee India is to pay Pakistan for the Iranian gas passing through its territory. Both, Pakistan and India, are desperate for energy resources to feed their booming economies, growing at more than 6 percent a year. Pakistan anticipates a major shortage of oil and gas by 2010. India, which imports 70 percent of its crude oil and produces barely half the gas it consumes, is hunting stakes in foreign oil projects and importing liquefied natural gas. Pakistan produces little over 3.5 billion cubic feet of natural gas a day, which meets 50 percent of its total energy needs. Its gas reserves are 45 trillion cubic feet while its scientifically estimated reserves are 450 trillion cubic feet.

ITN Source | February 24, 2007

Tags:. .economies. .size. .february. .consumes. .however