NEW DELHI: India has asked Pakistan to scale down the transit fee and transportation tariff that it is demanding for wheeling natural gas from Iran through the overland pipeline in the $7-billion deal stating that the present situation made the project unviable from India's point of view.

Project

Highly-placed sources in the Petroleum and Natural Gas Ministry informed that Petroleum Minister Murli Deora has met the visiting Pakistani Prime Minister, Shaukat Aziz, and its Foreign Minister, Khurshid Mehmood Kasuri, and took up the matter with them.

Mr. Deora is learnt to have told Mr. Aziz and Mr. Kasuri that what was being demanded by Pakistan was very high and whole project would become unviable from India's point of view.

He urged Mr. Aziz to scale down the transit fee as well as the transportation tariff so that the pipeline project proceeded smoothly.

`Pakistan to benefit'

Stating that Pakistan would stand to benefit the most from the gas pipeline project, Mr. Deora is learnt to have stated that Pakistan's demand for transit fee of $1.57 per million British Thermal Unit (mBTu) was too high and India was willing to pay 50 cents only.

He pointed out that in Europe also the transit fee was around 10 cents that too for transit only and not in cases where the transit country was also the beneficiary of the project. He said Pakistan was also going to use the gas from this pipeline and therefore the tariff should be lower.

As a goodwill gesture

Similarly, Mr. Deora is learnt to have stated that the $1 being demanded as transportation tariff was also on the higher side and this also needed to be revisited as India was only willing to pay 55 cents.

"It will be a great goodwill gesture and help in confidence-building between the two countries," Mr. Deora is learnt to have told Mr. Aziz.

A 48-inch pipeline from Iran is to carry 60 million standard cubic meters per day of gas that will be split equally between India and Pakistan.

The pipeline would benefit Pakistan more as Islamabad is in requirement of gas more than India.

Expectation

The Indian expectation of a transportation tariff of 55 cents per mBTu was based on a 13 per cent return on investment made by Pakistan in laying the section of the pipeline falling in its territory.

Of the 1, 035-km length of pipeline in Pakistan, only 240-km length of pipeline is exclusively meant for India's requirement. The balance 795-km length would be utilised by Pakistan.

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