Progress in gas pipeline talks with Pak

New Delhi: To resolve the differences over the fee to be paid by New Delhi to Islamabad for allowing flow of natural gas through a pipeline from Iran, India and Pakistan on Friday made 'good' progress in their technical talks.

"We made good progress but another round of technical dialogue will be held before we can say we have agreed on all the issues," a Government official told PTI at the end of two-day technical talks in New Delhi.

The next meeting of the technical group would be held in Islamabad next month.

India and Pakistan have differences over the transportation tariff for the 1,036-km pipeline section falling in Pakistan and the transit fee payable to Islamabad.

"We have narrowed down the differences," the official said but did not elaborate.

New Delhi had suggested a transportation tariff of $0.50 per million British thermal unit (mBtu) while Pakistan wants $1.57 per mBtu.

Islamabad is seeking a transit fee of 10 per cent of the gas price at India border (price payable to Iran plus transportation cost) while India is willing to pay a maximum of 5 per cent of the gas price at Iran-Pakistan border.

India and Pakistan are more or less in sync with Iran's latest formula, according to which the price of gas at $60 per barrel crude price comes to $4.93 per mBtu.

The official said the formula was also acceptable to New Delhi but it wants issues of transportation tariff and transit fee to be resolved before communicating acceptance to the formula.

"We think we are on schedule for the mid-June tripartite ministerial meet to ink the deal," the official said.

Iran plans to lay a pipeline from the giant South Pars gas field in Persian Gulf to carry 90 million standard cubic meters per day of gas. One third of the volume will be used by Iran for its domestic demand, while Pakistan and India will get 30 mmscmd each.

Iran's new price formula has a floor of $30 per barrel and a ceiling of $70 per barrel of Japanese Crude Cocktail price. If the price of JCC falls within the floor and ceiling, gas will be priced at 0.063 times of the JCC price, plus a fixed component of $1.15.

If JCC falls outside the range of 30-70, the multiplier will be 0.05. The fixed component will be $1.54 and $2.06 respectively, which JCC is priced below $30 per barrel and $70 per barrel.

Meanwhile, terming the pipeline ‘a bad idea’, America has warned India about it.

US Energy Secretary Samuel Bodman conveyed the warning during a recent three-day visit to India.