GAIL India, Pak firm to ink gas accord

The Indian state-run gas utility, GAIL India, will enter into a contract with a Pakistani firm to export natural gas through a pipeline from Punjab, Minister of State for Petroleum and Natural Gas Panabaaka Lakshmi told the Lok Sabha.

GAIL plans to import gas in its liquid form called liquefied natural gas on a port in Gujarat or Maharashtra.

After converting this again into gaseous state, it will transport the gas through cross-country pipeline network to Jalandhar. From Jalandhar, a 110-km line is proposed to be laid to the international border near Wagah for delivery to Pakistan.

"GAIL will enter into the necessary contract for export of regassified-LNG with its Pakistani counterpart based on import of LNG at Petronet's Dahej (import facility in Gujarat) or Dabhol LNG terminal (in Maharashtra)," she said in a written reply to a question in Lok Sabha.

"After regasification at the above terminals, R-LNG will be transported by GAIL through pipelines up to the delivery point located at the international border near Atari," she said.

Pakistan wants to import gas from India to meet its rising energy deficit. Initially, it wants to take 1-1.5 million tonnes of LNG (4-6 million standard cubic meters per day of gas). Pricing and other commercial agreements are being negotiated.

Oil Ministry sources said the delivered price of gas will be up to $22.3 per million British thermal unit after including transportation charges and all taxes and duties.

Considering imported LNG price of $14.50, the delivered rate will be $15.46 after considering shipping and import duty charges. After re-gassification and service tax, it would cost $17.01 per mmBtu.

Further, transportation of gas through trunk pipelines would cost a further $1.75 exclusive of service tax. Then again, $0.5 would be charged for transportation of gas through a dedicated pipeline up to Indo-Pak border bringing the total cost to about $19.54 per mmBtu.

A slew of other costs along with Value Added Tax (VAT) is expected to raise the price of gas to a final $22.3 per mmBtu at which it will be delivered to Pakistan, they added.