Gas transit fee procedure agreed with Delhi

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ISLAMABAD, Sept 2: Pakistan and India have agreed to adopt international standards for calculating transit fee for the Iran to India pipeline and to jointly ask Iran to get an independent third party certification of dedicated gas reserves for the $7.2 billion project, Dawn has learnt.

The second round of Pakistan-India joint working group discussions at the petroleum secretary-level, which is scheduled for Sept 7 to 8 in Islamabad, would further deliberate upon issues relating to a framework agreement, land acquisition, reserve certification, gas demand in India and Pakistan, transit fee, project structure, gas pricing mechanism, pipeline size and other related subjects.

This would be followed by ministerial-level meetings between India and Pakistan over the next couple of months to maintain a momentum of negotiations over the pipeline project because both the countries are fast heading towards energy shortages.

Petroleum ministry officials said that about a dozen similar transit pipeline contracts have been initially identified to work out transit fee Pakistan would get for allowing a 2,670-km pipeline from Iran’s South Paras field to India.

The sources said the two countries have agreed that Iran should provide an independent third party certification of gas reserves in South Paras field, which would be dedicated for the multi-billion dollar project.

The two south Asian countries also agreed that there should be a “fallback clause” in the trilateral framework agreement as a safeguard measure in case Iran is not able to provide guaranteed supplies to the project.

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