New Delhi
15 May 2007
The government on Tuesday said that the over 700 crore-dollar Iran-
Pakistan-India gas pipeline project has been found to be technically feasible but its
economic viability will depend on the price at which Tehran sells the fuel.
"Indian side had appointed Ernst and Young as the financial consultant and ILF, UK as
the technical consultant for preparation of the pre-feasibility report of Iran-Pakistan-India
pipeline project .... The project has been found to be feasible .... The price of gas against
the alternate fuel prices will determine the economic viability of the pipeline project,"
Union Minister of State of Petroleum and Natural Gas Dinsha Patel said in a written reply
in the Rajya Sabha.
India, Iran and Pakistan hope to sign a framework agreement on the project by the end of
June.
Iran has given a formula for determining gas price at the Iran-Pakistan border. New Delhi
is also discussing transportation tariff and transit fee to be paid to Pakistan for passage
of the pipeline from its territory.
"Once these issues are decided, the price of gas at Pakistan-India border would be
known and then a decision on the purchase of gas through Iran-Pakistan-India pipeline
project will be taken," Mr Patel said.
He said that the pipeline within Iran up to Iran-Pakistan border will be laid and operated
by an agency to be nominated by Iran. "Iran has offered to sell gas at Iran-Pakistan
border and all responsibilities for the safety and security of the pipeline within Iran will
vest with Iran," he said. In the Pakistan territory, out of 1035 kilometres, 800-kilometre
pipeline will be carrying the gas for both Pakistan and India. "The safety and security for
the pipeline and gas within Pakistan would be provided by the Pakistan government, for
which a transit fee would be levied," he said.
Mr Patel said that it had been agreed that the pipeline would be constructed as per
international standards, incorporating all the safety features as per prescribed standards
and specifications. It is envisaged to provide round-the-clock communication and
supervisory control system all along the pipeline.
The minister did not say what price Iran was quoting but a PTI report quoted sources as
saying that Tehran wants to sell natural gas to India and Pakistan at 4.93 dollars per
million British thermal unit (60 dollars per barrel crude oil price). Transportation tariff and
transit fee are added to this price.
The PTI report said that after last month's talks, Pakistan was seeking a transportation
tariff of 0.70-0.75 dollar per mBtu while New Delhi was not willing to pay more than 0.55
dollar per mBtu (220 million dollars) annually. Also, Islamabad was asking for 0.493
dollar per mBtu as transit fee while New Delhi has offered 0.20 dollar per mBtu.
Transportation tariff and transit fee have huge bearing on the cost of gas. The price of
gas as per the tariff proposed by India would be 5.68 dollars per mBtu at Indo-Pak
border. Had Pakistan's original demand been accepted, the price would have been
seven dollars per mBtu, the report said.
No comments:
Post a Comment