ISLAMABAD: Pakistan will save around $5 million a day if gas imported through a pipeline from Iran is used to generate electricity in place of furnace oil, Prime Minister’s Adviser on Petroleum Dr Asim Hussain said on Sunday.

Addressing a press conference, he said Pakistan already facing an energy crisis was heading for a severe gas shortage and it would have to import gas.

He rejected a perception that Pakistan would be importing gas from Iran at a very high price and said the pipeline would help it to reduce consumption of furnace oil, the key fuel for power generation in the country.

The adviser said the average price of Iranian gas would be $9.16 per million British thermal unit (MMBTU) at Multan station, while its furnace oil equivalent would cost $12.56.

At the current prices, he said, the country was bearing an additional cost of $5 million a day by using furnace oil for power generation when compared to the cost of IPI gas. The difference, he added, would increase if the price of furnace oil increased.

Pakistan has signed an initial agreement with the National Oil Company of Iran on May 24 for the supply of 750MMcfd of gas for generating 4,600 megawatts of electricity.

The Iran-Pakistan-India pipeline project was conceived in 1995, but India opted out of the project in 2008.

According to the project highlights prepared by the Intestate Gas Systems, the estimated cost of laying the 785km Pakistan segment of the 42-inch diameter pipeline is $1.24 billion. The German firm ILF has been appointed for designing the pipeline.