US expresses reservations over Pak-Iran gas project

The US energy team, on Thursday, expressed its serious reservations over billions dollar Iran-Pakistan gas pipeline project.

However, energy managers from Pakistan assured to execute the project keeping in view the international obligations regarding curtailment of energy crisis in future.

Sources in the Ministry of Water and Power informed Daily Times that during last day of Pak-US energy dialogue, which was jointly chaired by Special Envoy for International Energy Affairs Carlos Pascual and Federal Minister for Water and Power Syed Naveed Qamar, the US team raised their reservations over the IP gas pipeline project and stressed for adherence to international obligations under the United Nations resolution.

Sources said that US team offered Pakistani energy managers assistance in TAPI project as alternate to Iran-Pakistan gas pipeline project, while, on the other side, addressing the objections raised by the US team over the said project, federal minister for water and power assured the US envoy that Pakistan would go ahead with the IP gas pipeline project within the international obligations.

According to a well informed official in the energy sector, construction work on 750 km long pipeline in the country meant to import natural gas from Iran would likely be completed till the end of November, while 42-inch diameter pipeline would be laid down to connect Balochistan, Sindh and Punjab through Khuzdar to Karachi at the cost of $1.5 billion.

However, main pipeline would move towards Multan with joint venture of major gas distributors ‘Sui Northern Gas Pipeline Limited and Sui Southern Gas Company.’

Accumulated demand of natural gas in the country has been estimated at 6 billion cubic feet (BCFD) against the availability of gas reserve for consumption up to four BCFD across the country.

However, the federal government is committed to utilise all natural and imported resources to overcome the deficiency of 2BCFD in the country.

IPI project was initiated in 1994 after bilateral talks between Pakistan and Iran and preliminary agreement between both the countries was signed in 1995, while after four years in 1999, when Iran made a proposal to extend this project towards India both ties each other in a agreement.

However, India decided to withdraw from this project in 2009 and took the plea of high purchasing price and security issues, while, earlier, both Pakistan and India agreed to pay Iran $4.95 per MMBTU.

The second and last day of Pak-US Energy Dialogue concluded with a reaffirmation from the US side for its commitment to help Pakistan in its endeavors to resolve the energy crises, which is affecting socio-economic progress of the country.

US offered its support to establish a commercially viable and sustainable power sector in Pakistan.

The federal minister said that dearth of sufficient energy resources had emerged as one of biggest impediments in the growth of Pakistan’s economy, as energy resources happened to be the fuel for any economy.

According to the statement issued by the ministry, matters hampering the progress on various reforms were also discussed in detail, but not limited to circular debt, fuel availability constraints, soaring high prices of oil, and worsening fuel mix due to more dependence of thermal projects, especially based on oil due to fastly depleting natural gas reserves.

A detailed presentation was also given on the role of IPPs in Pakistan power sector and various incentives offered by the government to enhance private sector’s role in the power sector.

Detailed discussions were also held on various regional energy initiatives like import of Liquefied Natural Gas (LNG), Turkmenistan, Afghanistan, Pakistan and India gas pipeline project (TAPI), CASA and discussion with Uzbekistan for energy trade.

Source: Daily Times