Reuters: India and Pakistan have agreed on principles to calculate a transportation fee for Iranian gas to be supplied via a pipeline, but are yet to agree on the transit fee, a top Pakistani official said on Thursday. By Nidhi Verma
NEW DELHI (Reuters) – India and Pakistan have agreed on principles to calculate a transportation fee for Iranian gas to be supplied via a pipeline, but are yet to agree on the transit fee, a top Pakistani official said on Thursday.
“We haven’t agreed upon a formula but we have agreed on principles under which the transportation tariff will be computed,” Mukhtar Ahmed, energy adviser to Pakistan’s prime minister, told reporters.
“All the elements that contributed to the cost of the infrastructure will need to be taken into account, and clearly that cost would need to be recovered through a transportation tariff,” he said.
Indian, Pakistan and Iranian officials are meeting in New Delhi to discuss modalities of the proposed gas pipeline.
They were yet to reach an agreement on a fee for the gas moving across Pakistan into India, Ahmed said.
“But we do not expect this will be a roadblock in our way to concluding agreements regarding this project,” he said.
Transportation tariff and transit fees will be key in determining the delivery price of Iranian gas for India, and its acceptance by industries.
Ahmed said he hoped that a final agreement on the trination pipeline was just weeks away.
“The discussions today has gone very well… so I think it is a matter of weeks before we are able to conclude agreement on this project,” he said after the meeting.
Pakistan’s Energy Secretary Ahmad Waqar said Iran had proposed a new gas price review clause, which needed further discussions. He did not elaborate.
Hajjatollah Ghanimifard, international affairs director of the National Iranian Oil Company said: “Price revision is a common clause in any long term contract…this by no reason means that we are changing the formula (agreed on January 25).”
India, Pakistan and Iran are negotiating a proposed $7 billion gas pipeline deal for supplies of natural gas from Iran to feed the energy-hungry south Asian economies.
Iran has the world’s second-largest gas reserves after Russia. However sanctions, politics and construction delays have slowed its gas development, and analysts say Tehran is unlikely to become a major exporter for a decade.
The proposed pipeline will initially carry 60 million cubic metres (2.2 billion cubic feet) of gas daily to Pakistan and India, half for each country. The capacity would be raised to 150 million cubic metres at a later date.
The delivery point would at the Iran-Pakistan border.