Minister: Pakistan Committed to IPI Pipeline Project

A04855945.jpgTEHRAN (FNA)- Pakistan’s Federal Minister for Law and Parliamentary Affairs Farooq Naek Friday told the Senate that the government is committed to implement Iran-Pakistan-India (IPI) gas pipeline project.

“The government wants IPI project to be completed and implemented soon so that we can meet our energy requirements”, Naek told the House. He said the IPI project is suited to the requirements of the country and Pakistan has been active to clear all hurdles in the smooth implementation of the agreement.

Replying to a question raised by Pakistan Muslim League (Quaid-e-Azam)’s Nisar Memon during Question Hour, he hoped that the project will be finalized soon.

Naek said that two obstacles have impeded its progress. “The obstacles include Iran’s decision to renegotiate gas sales and Indian indecision to participate in the project”.

The Minister said implementation of the project would take five years to complete. He told the House that Iran and Pakistan have decided to establish a joint Finance Company on public-private partnership basis to raise funds for the project.

Iran and Pakistan initiated a Gas Sales Purchase Agreement earlier this year. India and Pakistan have also resolved all bilateral issues including transit fee which saw New Delhi boycotting IPI pipeline talks for about a year.

India has more or less agreed to give Pakistan a transit fee of $200 million per year, which is equivalent to $0.60 per million British thermal unit for allowing passage of the pipeline through that country.

India and Pakistan finally agreed in February 2007 to pay Iran $4.93 per million British thermal units ($4.67/GJ) but some details relating to price adjustment remained open to further negotiation. There was a breakthrough in the talks in April 2008 when Iranian President Mahmoud Ahmadinejad visited Pakistan and India.

According to the project proposal, the pipeline will begin from Iran’s Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh but officials now say the route may be changed if China agrees to the project.

The gas will be supplied from the South Pars field. The initial capacity of the pipeline will be 22 billion cubic meter of natural gas per annum, which is expected to be later raised to 55 billion cubic meter. It is expected to cost $7.4 billion.

According to Indian ministry sources, the IPI gas pipeline is quite crucial for New Delhi as after signing of the agreement, 60 million standard cubic meters per day (mmscmd) of gas is expected to be supplied in phase-I, which will be shared equally between India and Pakistan.

In phase-II, 90 mmscmd of gas will be supplied to India and Pakistan. So far six meetings of the trilateral joint working group (JWG) of the participating countries have been held with the last meeting being held in New Delhi on June 28-29, 2007.

India, Asia’s third-largest economy, can produce only half the gas it needs to generate electricity, causing blackouts and curbing economic growth. Demand may more than double to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7 to 8 percent a year, according to the Indian oil ministry.

Iran plans to start exporting gas to Pakistan in 2011. Iran has completed half the pipeline, which can carry 110 million cubic meters of gas a day, National Iranian Gas Company (NIOC) said in April. India uses about 108 million cubic meters of gas a day, according to a BP Plc report.

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