“The revenues from the gas sales will be used for general economic development of Iran,” Hajjatollah Ghanimifard, an international affairs director with the National Iranian Oil Company (NIOC), told reporters after a meeting with Oil Minister Murli Deora.
Iran has completed 18 percent of the work for the pipeline, which will supply gas from its prolific South Pars field up to Iran-Pakistan border, Ghanimifard said.
Pakistan said work has yet to begin on a 1,000 km stretch of the pipeline to link Iran with India.
“It is a segmented project, we have estimated the cost of laying the pipeline from Iran point to India at $2.5 to $2.75 billion at current prices,” Pakistan’s energy secretary Ahmad Waqar said.
He said the Pakistani leg of the pipeline, which runs about 1,000 kms, will be built on a public-private partnership basis.
The proposed pipeline will initially carry 60 million cubic metres of gas daily to Pakistan and India, half for each country. Its capacity will be raised to 150 million cubic metres at a later date.
On Thursday, India and Pakistan agreed on principles to calculate a transportation tariff for the Iranian gas, but were yet to reach on an agreement on the transit fee.
“We expect the transportation tariff should be around $0.6 to $0.7 per mBtu (million British thermal unit),” Indian oil secretary M.S. Srinivasan said.
Indian and Pakistani ministers are expected to meet in Islamabad next month to conclude the agreement on the transit fee, Pakistan’s Waqar said.
Iran’s Ghanimifard said a separate tri-lateral ministerial level meeting is expected to take place in Tehran to conclude the project agreement.
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 Iran is unlikely to become a major exporter for a decade.
