Govt to buy more Iran gas if India quits IPI project
By Khaleeq Kiani
ISLAMABAD, Jan 8: Islamabad intends to ask Tehran to increase the gas supply volumes for Pakistan by 50 per cent under the IPI pipeline project if India stays away from the deal.
This was decided by the Economic Coordination Committee (ECC) of the cabinet at a meeting on Tuesday.
The ECC decided to make a formal request to the Iranian side to allocate an additional volume of 1.05 BCFD (billion cubic feet of gas per day), to Pakistan, in case, India does not join the project, said an official statement after the meeting.
Originally, Pakistan was to get a total of 2.1 BCFD of gas from the 2600-km Iran-Pakistan-India pipeline project and India was to receive 3.2 BCFD, making a total of 5.3 BCFD. The pipeline length will come down to about 1600-km, if India decides to stay away.
Since India was not participating in the consultations on the project and had not formally taken a position whether or not to join the project, Pakistan decided to increase the import volumes given its increasing gas shortfalls and energy crisis in the country.
Therefore, if Iran agrees, gas volumes to Pakistan would increase to about 3.2 BCFD.
The delivered price of Iranian gas in Pakistan would be around $8 per MMBTU (million British thermal unit) at the current crude oil price of about $100 per barrel under the Japanese Crude Cocktail (JCC) based gas pricing mechanism already agreed to by the two countries.
Current gas prices in Pakistan are less than $2.6 per MMBTU, which means the imported gas would be about 200 per cent higher than domestic prices. The government, however, estimates that it would still be 40 per cent lower than furnace oil price. No government official was available to explain terms and conditions of the gas sales and purchase agreement between the two countries.
