Pak in talks with India over gas supply

India is willing to export 400 million cubic feet of gas per day to Pakistan but the matter hinges on finalising a tariff that is on the lower side, Petroleum and Natural Resources Minister Shahid Khaqan Abbasi has said.

Abbasi said a delegation from state-run GAIL, India's largest gas transmission and marketing company, had met him to assess Pakistan's willingness to import gas from India.

Gas would be imported from India only if the tariff is finalised on "the lower side", he said.

"Since the country is energy deficient, we showed our willingness and our experts would soon visit India to sort out the technical issues involved in it. After the report of the technical team, both the countries will initiate talks on the gas tariff issue," he was quoted as saying by The News daily.

India would lay a pipeline from Jalandhar to Attari and then to Wagah. Once an agreement is finalised, the project will take at least one-and-half years to complete.

LNG would be gasified by the Indian side and pumped into the pipeline for Pakistan, he said.

Pakistan's demand for gas stands at 8 billion cubic feet while the current production is 4 billion cubic feet.

Pakistan needs gas from all possible sources as it has no huge gas reserves, he said.

"So we need to exploit all indigenous and external potential to tap gas to cater to the country's needs," said Abbasi, a senior leader of the PML-N.

The minister further said that the new government will honour the agreement signed by the previous Pakistan People's Party-led government for the multi-billion Iran-Pakistan gas pipeline project as it was a pact signed between two sovereign countries.

Without mentioning the PPP-led government, Abbasi said Pakistan had signed the deal and so the PML-N government would honour it.

However, there are issues like gas pricing and the impact of sanctions imposed by the US and European Union countries, he said.

"I have not been so far briefed on the project. So I am not in a position to talk on this more," he said.

"We have asked the Foreign Office to let us know about the impact of the sanctions imposed on Iran by the US and EU countries on Pakistan once this project gets completed," Abbasi said.

"I haven't looked into the (Iran-Pakistan pipeline) agreement so far and the gas sales price agreement. However, we need the gas price (on the) lower side but to assess this, I still need to look into the gas sales price agreement under the project."

Asked whether his government would manage to obtain oil against deferred payments from Saudi Arabia, Abbasi said he didn't know whether that country had indicated it would provide such a facility.

Despite pressure from the US, the new Pakistan government has announced in its Annual Plan 2013-14 that it will implement the Iran-Pakistan gas pipeline project and target the first flow of gas for December 2014.

According to the energy strategy unveiled by the government in the Annual Plan released on Wednesday, the pipeline's cost has been reduced from an earlier estimate of $1.5 billion to $1.25 billion.

Pakistan intends to import 750 mmcfd of gas through the pipeline to generate 4,000 MW to overcome a power crisis.

According to the plan, the government plans to appoint a third party inspection agency for the project in June-July and to procure equipment and material to begin construction in fiscal 2013-14.