Announcing that Kabul and New Delhi have agreed on a transit fee of 49.49 US cents per MMBTU for the proposed Turkmenistan Afghanistan Pakistan and India (TAPI) gas pipeline project, the Petroleum Minister Dr. Asim Hussain said that after the signing of the final conclusive agreement, expected on May 24, will pave the way for Pakistan to seek revision in gas price for the other gas pipeline project with Iran, resulting in a saving of $ 1 billion per annum. Addressing a news conference on Friday the minister said that the price agreement between India and Afghanistan was made possible due to the Pakistan’s efforts. “We played a major role in convincing both the countries”. Islamabad had said at the outset that she will be charging the same transit fee from New Delhi as agreed with Kabul.
The minister said, all the downstream issues of the TAPI pipeline are settled and the upstream issues will be settled at the steering committee of the project on May 24 when final concluding agreement will be signed by the four participating nations”. When asked about the price of the imported gas he said it could not be divulged but it is lower than the Iran Pakistan (IP) gas pipeline. “We will be seeking a revision in gas sale price with Iran as there is a price renewal clause in the agreement allowing revision in sale price if low price gas is available from other sources”, he said adding that it will result in a saving of $ 1 billion. Denying the impression that Pakistan lacked financing to lay the IP pipeline he said that it’s financing was not a problem for Pakistan. He said the engineering, procurement and construction (EPC) contract will be awarded next week. A Chinese led consortium has backed out from financing the project while Russian giant Gazprom has not replied to the Pakistani offer to undertake the project. US is severely opposing initiation of the project. However, the minister said, “Pakistan’s stance is very clear on the IP. It should work”. On the efforts for changing the fuel mix, the minister said that orders have been issued to the Pakistan State Oil for setting up 100 LPG auto stations across the country at its outlets within next three months. The dealers will be bearing all the construction cost and the price of LPG will be totally deregulated, meaning that dealers will free to charge on their own, even though supplies will be ensured by the national flag carrier. Confident that LPG auto fuel will soon take off as alternate auto fuel in the country, he said that the motorists will enjoy the fuel contain more hi-octane than CNG. He said there will be no significant difference in LPG and CNG prices as estimated LPG mileage is Rs 6 per km , while that of CNG is Rs 5 per km as compared to petrol’s Rs 9.50 per km. About ending of the energy crisis, the minister candidly admitted that it would require at least three to five years overcoming the crisis. However, he said that the government has take decision to put the energy sector on the track again. “We have at least put the energy sector in the right direction”. On LNG, he said that it was a difficult issue as world over LNG is being sought to overcome energy shortages. He said the suppliers want long term agreements of upto 10 to 15 years period instead 3 to 5 years duration. The cost of short period supplies will be double than the long term supplies. He said that he has already visited Algeria and talks were held on LNG supply which they assured could be provided if an agreement on government to government basis was made. He said that a summary was being moved to ECC for final decision. In reply to a question related to the violation of rules in the appointment of Chairman Oil and Gas Regulatory Authority (OGRA), the minister said that the question should be pu to the Cabinet Division that made the appointment. Prime Minister has approved appointment of a retired bureaucrat Saeed Ahmad Khan as Chairman OGRA even though the post required 20 years experience in oil and gas sector. About the high unaccounted for gas (UFG) losses, he said the sui companies have reduced it from 15 percent to less than 10 percent but these should be further brought down to below 5 percent.
