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Pakistan and Iran to Sign Gas Sale Accord Next Month

Islamabad, Pakistan | March 18, 2008 by D-8 Secretariat

FuelIran will sign a final agreement to export gas via pipeline to Pakistan in April. Iran, the world’s No 2 holder of oil and gas reserves, has completed half of the pipeline, which will have a capacity to carry 110 million cubic metres of gas a day to Pakistan, senior pipelines expert at National Iranian Gas Vahid Zeydifard said, as reported by media source in Pakistan.

Iran plans to start exporting gas to Pakistan from 2011, a private TV channel reported. The 7.4 billion-dollar project, known as the “peace pipeline,” will carry gas from Iran to Pakistan and India to meet the growing energy demand of the two countries.

“Negotiations are at a final stage,” Zeydifard said, adding:.”Pakistan needs 50 million cubic metres of gas a day, and we can supply the rest to India if they want it.”

India currently uses about 108 million cubic metres of gas a day. Iran was unable to commission gas export projects either via pipeline or in liquefied form because US sanctions were preventing international lenders and investors from releasing funds, Zeydifard said.

Pakistan is facing a shortage of gas as domestic fields decline and may have to depend on Iranian fuel to meet demand, which is expanding by five percent a year. Iran and Pakistan had agreed on the pricing formula for transporting natural gas through the proposed pipeline, the official Islamic Republic News Agency reported on October 23.

The National Iranian Oil Company was developing the Kish field, which would transport gas via a 900-kilometre pipeline from Assaluyeh to Iranshar once it was completed, said Zeydifard, whose company transports gas in Iran. Pakistan could start receiving the gas when Iran completed a 400-kilometre section from Iranshar to the Pakistani border, Zeydifard said.

Iran halted gas exports to Turkey in January to meet soaring domestic demand due to extreme winter weather. “We have started exporting gas to Turkey again,” said Zeydifard.

“We had supply problems because of the cold weather and disruption of gas supplies from Turkmenistan,” he said. Iran sells gas domestically at 20 cents a million British thermal units. The benchmark gas price at Henry Hub, Louisiana, a gas trading point, is 10 dollars a million Btu. Iran might increase exports of gas this year to Turkey by 30 percent to 10 billion cubic meters, Zeydifard said.

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