ISLAMABAD: A Cabinet committee on economic affairs, chaired by Pakistan Prime Minister Shaukat Aziz, on Tuesday gave the green signal for a gas-sharing agreement with India in the proposed Iran-Pakistan-India pipeline project.

The arrangement was reached during the February 2007 meeting of the Petroleum Secretaries of India and Pakistan. Under it, the countries will share equally the 2.1 billion cubic feet of gas that Iran will send daily in the first phase. Of the 5.3 billion cubic feet Iran will send in the second phase, Pakistan will take 2.1 billion cubic feet, sending the rest to India.

The Economic Coordination Committee (ECC) of the Cabinet approved this and other decisions relating to the pipeline project, Petroleum Secretary Ahmad Waqar told a press conference here.

The ECC also approved the Petroleum Ministry's recommendation for a segmented approach to pipeline construction, meaning Iran and Pakistan will build separately their respective portions.

The Pakistan portion, which could be between 750 and 1,050-km long depending on its route, is estimated to cost $ 3 billion.

The ECC also approved, in principle, the gas pricing mechanism agreed upon between Pakistan and Iran. It will give its final approval if and when India comes on board the agreement for $ 4.93 per million British Thermal Units (mbtu) of gas at the Iran-Pakistan border.

India has said its agreement will depend on the transit fee it must pay to Pakistan for sending the gas onward. At the Petroleum Secretaries' meeting in February, Pakistan proposed a transit fee of 57 cents per mbtu, while India's offer was 15 cents.

An accord on the transit fee is awaited, while on the separate issue of transportation cost, the two have agreed on the principles that will determine the calculation.

Mr. Waqar said he was hopeful that the pipeline construction would begin next year and be completed in four years, with the first gas delivery in 2012. He said Iran was already working on its portion of the pipeline.

Printer friendly page  
Send this article to Friends by E-Mail