Pakistan mulling cheaper price for gas supplies from Iran

Pakistani officials said they may renegotiate a price agreement with Iran for the 750 million cubic feet per day (MMCFD) of natural gas the country plans to import by December 2014 under a $3.6 billion pipeline deal.They said the talks will be held on the basis of the lower gas price parameters 'finalized' under the Turkmenistan, Afghanistan, Pakistan and India (TAPI) gas pipeline project with Turkmen government. Tehran and Islamabad inked the Gas Sales Purchase Agreement (GSPA) of Iran-Pakistan (IP) gas pipeline project in June 2009 within certain terms and conditions, including that Pakistan would pay 78 percent of crude oil parity price to Iran after mutual consensus of both countries. "After inking GSPA with Turkmen president under $7.6 billion TAPI gas pipeline project today at Islamabad, the Pakistani government would start the renegotiation process with Tehran over gas import under IP project to bring the gas purchase price from 78 percent of crude oil price in international market to downward," said Federal Minister for Petroleum and Natural Resources Dr Asim Hussain. Talking to media men, Hussain said that gas purchase price would be resettled with Iran and resettlement of new price would save $100 million from the actual cost $1.25 billion of IP gas pipeline project for his country. He further said that survey and design work on IP gas pipeline has been completed. The remarks by the Pakistani petroleum minister came as he also cautioned that gas shortage would be crucial during first quarter of next year, therefore supply to industries and gas stations would be shut down for three days a week in winter and provision of uninterrupted gas supply would be ensured to domestic consumers on priority basis during ongoing winter season. Because of severe disagreements between US and Iran, Washington has expressed serious concerns over IP project and has been forcing Pakistan to abandon this project and shift to TAPI project. The Iranian government has completed the IPI project pipeline section of 1100km, however, the work on the Pakistani side would start before the end of this year. Lack of funds and worsening law and order situation in Balochistan has delayed the construction work According to well-informed officials in the energy sector, construction work on the 750km pipeline is likely be completed by the end of this month, while a 42-inch-diameter pipeline would be installed to connect Baluchistan, Sindh and Punjab through the Khuzdar to Karachi at a cost of $1.25 billion.