Business Recorder
Published Date: Nov 13, 2013
Pakistan, Iran urged to ink bilateral treaty to complete IP gas project
Pakistan and Iran should ink a bilateral treaty to complete
Iran-Pakistan (IP) gas pipeline project and to avoid international
sanctions. This was stated by Dr Abid Suleri, Executive Director,
Sustainable Development Policy Institute (SDPI), Arshad Abbasi, Energy
Advisor SDPI, Shaukat Hameed Khan, Vice Chancellor Center for Advanced
Studies in Engineering (CASE) and Saad Saleem, Managing Director NayaTel
here on Tuesday while addressing a joint press conference.
Suleri said that Pakistan’s growing energy needs can be
substantially met through import of gas from Iran via the IP gas
pipeline project. However, there is a need to re-evaluate the gas
pricing mechanism for the purpose, he added. The press conference came
following the recent statement by Hamid Raza, Managing Director of
National Iranian Gas Company (NIGC), suggesting that the gas price has
not yet been fixed and can be reviewed if Pakistan formally requests
Iran.
Regarding the anticipated international sanctions the project
might draws, Suleri pointed out that Iran is already exporting gas to
other countries including Turkey and Armenia. The average price of per
unit electricity produced by using local gas costs five rupees while
production of one power unit through IP would cost Rs 16 per unit, which
is almost four times higher as compared to the domestic cost.
To a question, he said that funding options for the project
would be more secure if a sovereign bilateral agreement is reached
between the two countries and signed between Iran and Pakistan. Pakistan
can also explore the option of exporting wheat to Iran in exchange for
gas from the latter. On concerns regarding India blocking an
Iran-Pakistan gas deal, he said that India is an emerging economy with
higher energy needs; if a gas pipeline materialises between Iran and
Pakistan, it can also be extended to India in the future.
Speaking at the press conference Arshad Abbasi said that SDPI’s
study on the IP gas pipeline had played an important role in generating a
policy debate on the issue. He added that the report was reviewed by
independent experts and requested all concerned stakeholders, including
government, academia, media and intelligentsia to come forward and
contribute towards a concrete policy framework particularly in the
context of Pakistan’s pressing energy needs.
He emphasised the need to de-link the price of gas from that of
oil in international market, particularly considering Iran’s willingness
to reconsider gas pricing for Pakistan. Shaukat Hameed Khan said that
drilling options had not yet been fully explored and utilised in
Pakistan. The number of wells drilled in the country is already too low,
despite Pakistan’s persistent energy crisis.
He called for reform not only in the Oil and Gas Development
Company but also in the Oil and Gas Regulatory Authority. He also opined
that the IP project can generate economic activity in the less
privileged areas of Balochistan. Saad Saleem observed that there was a
need to dispel the notion that energy prices were completely linked to
international oil prices, which, in turn are linked to movements in the
US dollar.