ISLAMABAD, Feb 14: Qatari Petroleum and Natural Gas Minister Abdullah bin Hamad al-Attiya arrives here on Tuesday to speed up negotiations over the $3-billion Gulf-South Asia pipeline project and discuss possible oil sales to Pakistan.

Informed sources told Dawn on Monday that Abdullah bin Hamad al-Attiya, who was also second deputy prime minister of Qatar, would stay here for two days and hold meetings with the president, the prime minister and his Pakistani counterpart Amanullah Khan Jadoon and his team.

The sources say the visit is part of Pakistan's last round of discussions with all key stakeholders of three possible gas import pipelines emanating from Qatar, Iran and Turkmenistan before it takes a decision as to which of three projects it should take first and then second.

Prime Minister Shaukat Aziz and Petroleum Minister Amanullah Khan Jadoon are expected to visit Iran by the end of this month to hold similar discussions with Iran on a separate gas pipeline to Pakistan and possibly to India. This will be followed by a steering committee meeting of Turkmenistan-Afghanistan-Pakistan pipeline next month in Islamabad.

The Qatari oil minister's meetings in Pakistan will also be attended by the senior management of Crescent Petroleum of Sharjah, which has been engaged as sponsor by the Qatar government to develop its gas field, lay a pipeline from Qatar and sell natural gas to Pakistan.

The meetings are expected to be followed by formal negotiations on prices at which Crescent Petroleum will deliver to Pakistan. The two sides had agreed in December last year to start price negotiations to formally sign gas sales and purchase agreement (GSPA) as early as possible.

"It was agreed in a meeting held in December last year between Crescent Petroleum and the government of Pakistan that once the gas quantities are communicated to Crescent, the parties will meet within one-month to finalize gas price in Pakistan," Mohammad E. Makkawi, Crescent Petroleum's project director, told Dawn.

Pakistan has conveyed to Crescent about its firm gas requirements a few days ago and formal negotiations could start any moment, he said. The pipeline gas prices are expected to be linked somehow with the international crude oil prices.

Pakistan has estimated that it would require 500-700 million cubic feet of gas per day (mmcfd) by 2010 and 2.2 bcfd by 2014 which could further increase to about four bcfd by 2020 and thus require two pipelines over the longer term.

The trans-national pipeline politics has gained momentum following Pakistan's decision to go ahead with gas import plan at any cost to meet its economic growth demand and a subsequent decision by the Indian cabinet to start negotiations for gas import pipelines.

The sources said that Crescent Petroleum had envisaged its pipeline size at 40-inch and 34-inch diameter to accommodate about 2.8 bcfd of gas in the peak winter season.

They said a pipeline from Qatar was more feasible in view of minimum political strings attached to such a big project in view of Qatar's relations with the United States and the project being pursued by the private sector on purely commercial basis.

On the other hand, the sources said, the Iranian gas had a political opposition from the United States that would keep US and Japanese companies and financial institutions away from the project and Iran's inability or lack of priority to pursue such a project at its own.

The sources said Turkmenistan too had long-term gas supply agreements with Russia and Ukraine and involved security problems in Afghanistan. They said Turkmenistan used the option of gas sales to Pakistan and India to improve its gas prices with Russia and Ukraine and has successfully increased prices from $0.95 to about $1.50 per mmbtu (million British thermal units).

The sources said Pakistan's option for liquefied natural gas (LNG) imports for an interim period of four or five years was strategically and economically imprudent because the LNG option was not viable for less than 10 years and its landed cost would be much higher than pipeline gas.

The sources said Qatar was also offering oil supplies to Pakistan, as it wanted to diversify its sources for security reasons. The Qatari minister would be discussing various options on that account with his Pakistani counterpart and petroleum ministry officials.

Qatar has also asked Pakistan to play a middleman's role by purchasing gas from Qatar and selling it to the Indian market, but this seems almost impossible owing to local politics in South Asia.

Sharjah-based Crescent Petroleum had submitted a draft agreement to Islamabad in July 2001 to lay a 1610-km of 40" diameter pipeline offshore along the Iran-Pakistan coastal line up to Jiwani, near Karachi to transport 1.6 bcf (billion cubic feet), going up to 2.8 bcfd natural gas with an off take of 1,000 mmcfd from the year 2010 onward.

Qatar possesses the third largest natural gas reserves in the world or 50 per cent more than those of entire United States. It eyes on becoming a major petroleum player in the coming decade with prospects of the world richest nation in per capita gross domestic product.

The issue of gas tariff between the Qatar government and Crescent Group has been hindering the execution of the pipeline project in the past, but a settlement is reported to have been reached on that account, the sources said.