Economics & Business

India-Pakistan likely to resolve IPI tariff issues

ISLAMABAD: Pakistan and India are likely to resolve their differences over tariff and transit fee for the proposed Iran-Pakistan-India (IPI) gas pipeline project by holding talks in Islamabad on April 16-18. Later the petroleum ministers of both Pakistan and India would meet on April 23 of this month to finalise the issue. Informed sources said on Thursday that technical teams of both the countries would meet to firm up their recommendations to be placed before the petroleum ministers of Pakistan and India who were scheduled to meet in Islamabad on April 23, 2008.

Both sides had earlier resolved their differences over the transportation fee and they now were focussing on tariff and transit fee issues for the Iranian gas to be transported to India through Pakistani border. An official of the ministry of petroleum and natural resources when approached said that both the technical level and ministerial level talks were very important to finalise their talks on gas pipeline project after which further meetings will be lined up with Iran in May.

‘Iranian side will be briefed next month about the outcome of talks between Pakistan and India’, he said hoping that all the ‘lingering issues’ will be sorted out within this month between the two countries over the gas pipeline project costing $5.4 billion. The official also said that both sides would also discuss issues concerning $6 billion, 2000 Km Turkemenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. “TAPI is a parallel project that India and Pakistan are also discussing simultaneously,” he said.

The Asian Development Bank (ADB), he said, is expected to invite the officials of all the all the four countries in the third week of this month to revive their dormant TAPI gas pipeline project to ease the energy crisis in the region. However, there still existed various challenges to the TAPI project. They said the security situation in Afghanistan and relations between Pakistan and India need to improve and fuel subsidies in the two countries have to be phased out.

The TAP gas pipeline of 56 inch diameter needs at least 30 billion cubic meter (BCM) of gas per year from Turkmenistan to reach Pakistan via Afghanistan. Sources also said that senior Pakistani officials have been informed by Iran that it has sorted out 40-50 per cent ‘logistic issues’ to undertake the work on Iran, Pakistan and India (IPI) gas pipeline.

Pakistan was told that Iran has asked India to join the project without caring for the opposition of the United States. India conceded that while it continued to face pressure from the United States ‘not’ to join the project, it cannot ignore its increasing gas requirements and that it was still interested to ‘pick up substantial quantities of gas from Teheran’.

Pakistan had also asked Iran to enhance gas volumes for Islamabad by 50 per cent under the pipeline project in case India stays away from the trans-national deal. Pakistan would soon be making 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.

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 total to 5.3 BCFD. The pipeline length will come down to about 1600-km, resultantly reducing the project cost, in case India decides to stay away. Gas volumes to Pakistan would, therefore, increase to about 3.2 BCFD. Sources also said that in the absence of both Iran and Turkmenistan gas pipeline projects, the government has started working on another project to meet its growing gas requirements.

About the author

Rubab Saleem

Rubab Saleem is Editor of Pakistan Times

Add Comment

Click here to post a comment

Your email address will not be published. Required fields are marked *