ID :
40919
Fri, 01/16/2009 - 10:26
Auther :
Shortlink :
http://m.oananews.org//node/40919
The shortlink copeid
Pak might opt out of IPI project
Islamabad, Jan 15 (PTI) With prospects of any agreement with India still hanging, Pakistan might also opt out of the proposed USD 7.4 billion tripartite gas pipeline project with Iran.
Pakistani authorities might recommend to parliament to
abandon the proposed Iran-Pakistan-India gas pipeline project
as Tehran is demanding higher gas prices, a media report said
Thursday.
With Iran seeking an "exorbitant" USD 10 to 11 per mmbtu
of gas from Pakistan, the authorities believe the project is
no longer economically viable for the country, an unnamed
petroleum ministry official told The News daily.
The recommendation to abandon the project may be made
during a meeting today of a steering committee chaired by Asim
Hussain, the Adviser to the Prime Minister on Petroleum.
The committee is set to discuss the pros and cons of the
"irrational demand" of Iran with regard to gas prices and
other related issues.
After framing recommendations for the future strategy for
the pipeline project, the committee will sensitise parliament
on the issue and leave it to the House to decide to either
continue the dialogue with Iran or to quit the project.
The official said Pakistan and Iran had earlier agreed on
a price of USD 6.66 per mmbtu of gas in December 2007.
The petroleum ministry briefed Prime Minister Yousuf Raza
Gilani about three months ago and advocated "abandoning the
project keeping in view the irrational demands of Tehran".
In that meeting, the ministry recommended the government
should instead go in for "aggressive exploration and
production of oil and gas" within Pakistan.
The country is rich in oil and gas, particularly in
Balochistan province, and if the government "manages to
enforce its writ by giving the ownership feeling to the local
people, then aggressive oil and gas exploration can be carried
out", sources told the newspaper.
The official said there was a "complete failure" in talks
with Iran when Asim Hussain recently visited Iran. The
deadlock in parleys was a setback for energy-starved Pakistan
as both countries had initiated negotiations in 1992-93 and
there "still seems no light at the end of the tunnel" with
regard to beginning work on the much-delayed pipeline.
Iran shocked Pakistan by backing out of a proposed gas
sales purchase agreement some months ago and coming up with
new proposals for selling gas under the project. Since then,
no progress has been made on the issue, the official said.
Other than the hike in gas prices, Iran has said that if
gas supply to India is "wilfully disrupted by Pakistan", then
it will reduce the supply of gas to Pakistan in the same
proportion, the report said.
Tehran also wants Islamabad to allow one price review
before the project becomes operational. Under this proposal,
Iran will be authorised to re-open the price formula even
before the commencement of the project.
Iran also wants to move the price formula closer to spot
market prices, rather than long-term contract prices which are
imperative to establish the viability of the project. Pakistan
is of the view that uncertainty in gas prices will make the
IPI project economically unviable.
Pakistan's stance is that the price of imported gas must
be competitive when compared to alternate fuels available in
the domestic market, the report said. PTI RHL
DEP
Pakistani authorities might recommend to parliament to
abandon the proposed Iran-Pakistan-India gas pipeline project
as Tehran is demanding higher gas prices, a media report said
Thursday.
With Iran seeking an "exorbitant" USD 10 to 11 per mmbtu
of gas from Pakistan, the authorities believe the project is
no longer economically viable for the country, an unnamed
petroleum ministry official told The News daily.
The recommendation to abandon the project may be made
during a meeting today of a steering committee chaired by Asim
Hussain, the Adviser to the Prime Minister on Petroleum.
The committee is set to discuss the pros and cons of the
"irrational demand" of Iran with regard to gas prices and
other related issues.
After framing recommendations for the future strategy for
the pipeline project, the committee will sensitise parliament
on the issue and leave it to the House to decide to either
continue the dialogue with Iran or to quit the project.
The official said Pakistan and Iran had earlier agreed on
a price of USD 6.66 per mmbtu of gas in December 2007.
The petroleum ministry briefed Prime Minister Yousuf Raza
Gilani about three months ago and advocated "abandoning the
project keeping in view the irrational demands of Tehran".
In that meeting, the ministry recommended the government
should instead go in for "aggressive exploration and
production of oil and gas" within Pakistan.
The country is rich in oil and gas, particularly in
Balochistan province, and if the government "manages to
enforce its writ by giving the ownership feeling to the local
people, then aggressive oil and gas exploration can be carried
out", sources told the newspaper.
The official said there was a "complete failure" in talks
with Iran when Asim Hussain recently visited Iran. The
deadlock in parleys was a setback for energy-starved Pakistan
as both countries had initiated negotiations in 1992-93 and
there "still seems no light at the end of the tunnel" with
regard to beginning work on the much-delayed pipeline.
Iran shocked Pakistan by backing out of a proposed gas
sales purchase agreement some months ago and coming up with
new proposals for selling gas under the project. Since then,
no progress has been made on the issue, the official said.
Other than the hike in gas prices, Iran has said that if
gas supply to India is "wilfully disrupted by Pakistan", then
it will reduce the supply of gas to Pakistan in the same
proportion, the report said.
Tehran also wants Islamabad to allow one price review
before the project becomes operational. Under this proposal,
Iran will be authorised to re-open the price formula even
before the commencement of the project.
Iran also wants to move the price formula closer to spot
market prices, rather than long-term contract prices which are
imperative to establish the viability of the project. Pakistan
is of the view that uncertainty in gas prices will make the
IPI project economically unviable.
Pakistan's stance is that the price of imported gas must
be competitive when compared to alternate fuels available in
the domestic market, the report said. PTI RHL
DEP
