Pak says ready to lower transit fee for Iran gas to India, invites Deora for talks

Islamabad has extended an olive branch to get New Delhi back into the negotiations on the proposed Iran-Pakistan-India gas pipeline.

Islamabad has extended an olive branch to get New Delhi back into the negotiations on the proposed Iran-Pakistan-India gas pipeline. It has offered to charge India a transport fee based on global practice rather than the arbitrary tariff it sought last February.

“Pakistan is committed to provide transit facilities to India for the gas from Iran… We are keen to restart consultations with India to arrive at a mutually acceptable tariff compatible with international norms,” says a letter from Ahsanullah Khan, Pakistan’s Minister for Petroleum & Natural Resources, to his Indian counterpart Murli Deora.

Khan has invited Deora for bilateral talks in Pakistan ahead of the trilateral meeting between the three countries “to discuss the way forward” on February 12-13. “I would like to invite you to visit Pakistan on February 7-8 before our meeting in Tehran so that we could move ahead on our bilateral transit arrangements,” he wrote.

To demonstrate Pakistan’s keenness to carry India in the multi-billion dollar project, Khan assured that the “design and infrastructure of the pipeline being prepared by us caters for the quantities of gas for India”.

At an unscheduled meeting on January 26 in London, both ministers had expressed their keenness to put the pipeline project on stream as negotiations between the three countries have been stalled because of differences between Islamabad and New Delhi over transport and transit fee to be charged from India.

The trilateral has to be preceded by the bilateral meeting, but three fixtures were deferred due to the political conditions in Pakistan.

At the fourth bilateral in February 2007, Pakistan sought $1.57 per million British thermal unit (mBTU) for supply of gas over 1,035 km pipeline it would lay in Pakistan. India, using estimates prepared by consultant Gaffney Cline & Associates, offered a transmission charge of $0.69 per mBtu.

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As for the transit fee, Pakistan wants it pegged at 10 per cent of the delivered price of gas to India which says it would pay 5 per cent considering the economic benefits to Pakistan from the pipeline. As Pakistan was not purely a transit country and was also a gas recipient, the transit fee should be lower, India argued.

Ministry sources said that Khan’s request was sent to the Ministry of External Affairs on Friday for approval. “Since the present government in Pakistan is a caretaker and polls are scheduled on February 18, it is for the MEA to decide whether any talks at this stage would be meaningful,” they said.