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Published Date: Nov 12, 2013

SDPI Press Release (November 12, 2013)

Pakistan’s growing
energy needs can be substantially met through import of gas from Iran
through the Iran-Pakistan gas pipeline project. However, there is a need
to reevaluate the gas pricing mechanism for the purpose. This was
stated by Dr. Abid Suleri, Executive Director, Sustainable Development
Policy Institute (SDPI) at a press conference held at SDPI today.
The press conference came as a follow-up to 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 changed.

With
regards to the government’s fear of sanctions being imposed on the
country if Pakistan is to sign a deal on import of gas from Iran, Dr.
Suleri pointed out that Iran is already exporting gas to other
countries, including Turkey and Armenia. Answering questions from media
representatives present at the occasion, he further added that funding
options for the project would be more secure if a sovereign bilateral
agreement is reached 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 materializes between Iran and Pakistan, it can
also be extended to India in the future.

Arshad
Abbasi, Energy Advisor at SDPI, said that SDPI’s study on the Iran
Pakistan gas pipeline has 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 policy framework particularly in the context of
Pakistan’s pressing energy needs. He further emphasized the need to
de-link the price of gas from that of oil in international markets,
particularly considering Iran’s willingness to reconsider gas pricing
for Pakistan.

Shaukat
Hameed Khan, Vice Chancellor Center for Advanced Studies in Engineering
(CASE), said that drilling options have still not been fully explored
and utilized in Pakistan. This is all the more important in so far as
off-shore drilling is concerned. 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
(OGDCL) but also in the Oil and Gas Regulatory Authority (OGRA) in
Pakistan. He also opined that the IP project can generate economic
activity in the less privileged areas of Balochistan.

Saad
Saleem, Managing Director NayaTel, observed that there was need to
dispel the notion that energy prices are completely linked with
international oil prices, which, in turn are linked with movements in
the US dollar. Given security and other complications that can emerge
with the execution of a gas pipeline project between Iran and Pakistan,
the latter can also consider overhead lines for import of electricity
itself to meet domestic needs.