China ready to join tri-nation gas project
Saturday, 29 March 2008

China has told Pakistan it is ready to join a gas pipeline project to import Iranian gas if India decides not to be part of the multi-billion dollar venture, reports PTI.

Pakistan and Iran have finalised a gas purchase agreement while India is yet to complete modalities for joining the project mainly due to differences with Pakistan over the transit fee to be paid for the gas transported through Pakistani territory.

Iran had been asked by Pakistan earlier this month to finalise the Iran-Pakistan-India pipeline project by April because of its rising gas requirements. Iran said it was holding final talks with India to persuade it to join the project.

Iran had also told Pakistan that if India continued to show its reluctance to join the project “under US pressure”, Tehran would invite Beijing to join the venture, the influential Dawn newspaper reported Tuesday.

“The Chinese have told us that they are ready to join it,” a source in the petroleum and natural resources ministry told Dawn. Pakistan has asked Iran to enhance the volume of gas to be supplied by 50 percent if India opts out of the project.

In such a scenario, Pakistan will make a formal request to Iran to allocate an additional volume of 1.05 billion cubic feet of gas per day (BCFD). Sources said Pakistani officials had been informed by Iran that it had sorted out 40 to 50 percent of “logistic issues” on the IPI project.

Under the original plan, Pakistan was to get 2.1 BCFD of gas from the IPI project and India 3.2 BCFD. If India stays away, the length of the pipeline will be reduced to about 1600 km, reducing the total cost of the project.

The volume of gas that Pakistan will get will increase to about 3.2 BCFD. Meanwhile, the Asian Development Bank is “regrouping” officials of Turkmenistan, Afghanistan and Pakistan in the third week of April to revive the TAP gas pipeline project in view of the energy shortage in the region.

The petroleum ministry sources said India is willing to attend a meeting of the steering committee for the 6 billion- dollar, 2,000-km project in which it has the status of an observer. However, there were still challenges to the project, the sources said.

The security situation in Afghanistan and relations between Pakistan and India need to be improved and fuel subsidies in the countries will have to be phased out, they said.

The long-term competitive advantage of TAP over the option of liquefied natural gas (LNG) also has to be determined. The TAP pipeline with a 56-inch diameter needs at least 30 billion cubic metres (BCM) of gas a year from Turkmenistan to reach Pakistan via Afghanistan.

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