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Our Bureau

Hopes to sign final pact in June; meet with Pak officials next week

MR MURLI DEORA

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New Delhi Feb. 6 With a broad consensus emerging between the buyers (India and Pakistan) and the seller (Iran) on the contentious issue of price of gas to be transported through the proposed Iran, Pakistan, India (IPI) pipeline, a bilateral official-level meeting between India and Pakistan is expected to take place in the next two weeks to synchronise the issues.

The Union Minister for Petroleum and Natural Gas, Mr Murli Deora, told newspersons here on Tuesday that India was agreeable to a formula on gas pricing suggested by the international consultant Gaffney, Cline and Associates (GCA).

New formula

Mr Deora hoped that the final agreement between the three countries on pricing formula for gas to be transported through the proposed pipeline would be signed by June-end.

The formula was discussed at a trilateral meeting held last month in Tehran. The formula envisages linking the price of natural gas from Iran to Japanese crude cocktail price (JCC) or Japan's average custom-cleared crude oil imports price, which is about $1-1.5 a barrel higher than the Indian crude basket. Indications are that at Rajasthan Border, the gas could cost India $5-6 per mmBtu.

The consultant has recommended linking the gas price to the average of the six-month Japanese crude basket, preceding the month of delivery. "Iran has requested to be allowed to participate in the bilateral Secretary level talks between India and Pakistan as an observer. We hope to have the meeting in the next two weeks," the Minister said after his meeting with the Union Minister for External Affairs, Mr Pranab Mukherjee. The External Affairs Minister left for Tehran on Tuesday on a two-day visit to boost relations between India and Iran.

Transit fee

As regards the transit fee to be levied by Pakistan, India could seek a waiver. "As a measure of goodwill, we will request Pakistan to waive the transit fee," he said. Issues like such as transportation tariff and other aspects of buyer countries are to be discussed at the bilateral meeting between India and Pakistan.

The proposed IPI pipeline is estimated to cost over $7 billion and will carry up to 60 mmscmd of gas through the pipeline in the first phase.

Related Stories:
Gas pipeline project to be made safe of all risks, says Aiyar
Trans-national pipeline project — India, Pak may seek global certification on Iran gas reserves

More Stories on : Petroleum | Infrastructure

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