This is going to be a big boost to Pakistan which desperately needs more energy, and the added bonus of getting royalties from India arent bad either…
Good for relations and good for the economy of all three countries!
Accord reached on gas-sharing formula for IPI
By Sher Baz Khan
ISLAMABAD, Feb 23: Pakistan and India will get an equal share from the 2.1 billion cubic feet (BCF) of gas which the Iran-Pakistan-India (IPI) gas pipeline project will provide on a daily basis in the first phase of the project beginning in 2010-11.
This was decided in the fourth meeting of the Pakistan-India Joint Working Group on the IPI gas project that concluded here on Friday after two days of technical deliberations.
Pakistan and India agreed to complete documentations on transportation tariff, transit fee, gas volume sharing, joint declaration, gas sales and purchase agreement, project structure, appointment of project coordinator and feasibility study for the project before June this year.
Both sides agreed to appoint a joint consultant for conducting the feasibility study for the project. The study would be completed in six to nine months and Iran would act as an observer in the process.
Secretary of Petroleum and Natural Resources Ahmed Waqar told a news conference at the end of the talks that both sides had agreed on the gas-sharing formula of the project.
India had demanded 3.2 billion cubic feet (BCF) per day, while Pakistan sought 2.1 BCF a day for 30 years.
In the first phase of the project, both India and Pakistan would get equal shares (1.05BCF a day) from the total supply of 2.1 BCF per day. And, in the second phase, the two countries would get their remaining shares.
“We will get the gas supply right at the Pak-Iran border and the pipeline will pass through Balochistan,” said Mr Waqar in reply to a question.
He said Pakistan would not wait till the first phase and would try to complete laying of its own pipeline inside its territory for getting the gas supplies well before 2011.
He refused to share with media the three available options given by a feasibility study conducted by the National Engineering Services of Pakistan (Nespak) regarding the exact location of the pipeline.
He said the exact cost of the project could not be calculated without taking into account the latest price of steel, but it had been estimated to cost around $7billion. The length of the pipeline from Pak-Iran border to Pak-India border was 22,00 kilometres.
Mr Waqar and his Indian counterpart, M.S. Srinivasan, reiterated positions of their respective governments by expressing their commitment to the project.
However, they refused to comment on political questions about the growing US opposition to the project due to its differences with Iran and the law and order situation in Balochistan.
They said the supply of sustainable energy was needed for the economic growth and industrial development of the two countries.
“India needs energy for sustaining its economic growth,” Mr Srivinasan observed while responding to a question.
“Pakistan is well committed to this project because this is in our national and economic interest and vital for keeping the pace of our economic growth going,” Mr Waqar said.
He, however, refused to comment on the transportation cost of the project and said that various options were being discussed in this regard.
He said the charges Pakistan would levy on India for allowing the pipeline to pass through
its land would be according
to international practises and both countries had agreed on the technical details in this regard.
The Iranian delegation, which participated in the meeting as an observer, was led by Mr Fattah Bayatani, general manager of marketing and sales for the National Iranian Gas Export Company.
He told journalists that Iran had enough gas reserves and that the IPI pipeline would be linked to the world’s second largest gas reserves.