Iran and Pakistan finalise gas export contract

Mar 14, 2009 01:00 AM

"The content of the Peace Pipeline contract has been finalised and all the points prepared by the two sides' legal experts have been re-read and agreed by the two sides," Iran's deputy minister in charge of the project, Hojatollah Ganimifard, was quoted as saying.
The announcement follows almost two months of negotiations between officials of both countries. Officials from Pakistan and Iran have said, "The economics of the project will improve with Indian participation but... the project is economically viable as a bilateral project also".

The project, in its present state, envisages the construction of a 2,600-km-long pipeline that would bring gas from Iran's giant South Pars field to Pakistan and India. However, the controversy surrounding the Iran-Pakistan-India (IPI) pipeline notwithstanding, New Delhi is set to formalise its participation in the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.
India's Finance Minister P. Chidambaram had said in February that New Delhi would be a participant in the IPI gas pipeline project.

The 10th meeting of the steering committee for the project scheduled for November 28-29 in Islamabad will witness the endorsement of the framework agreement between all participating countries, thereby formalising India's participation.
In a letter to the energy ministers of India, Pakistan, Afghanistan and Turkmenistan, the Asian Development Bank (ADB) -- the nodal agency for implementing the TAPI project -- has also proposed the signing of heads of agreement (HoA) between the seller (Turkmenistan) and the three buyers: Afghanistan, Pakistan and India. The pipeline will transport gas from the Dauletabad gas fields of Turkmenistan to the three countries.

The draft HoA forwarded by ADB carries an undertaking by Turkmenistan that the Dauletabad gas field has firm natural gas reserves of 159 tcf, which is more than sufficient to meet the gas supply obligation of 34.26 tcf to Afghanistan, Pakistan and India in the first phase of the project. Under the HoA, Turkmenistan will by December 31, 2007 provide to the governments of the three buyer nations a certification of gas reserves in the field by a reputed international firm.
In the first phase, Pakistan has indicated a requirement of 15 mm cm of gas per day in the first year going up to 45 mm cmpd annually in the third year of the project whose lifetime is pegged at 30 years. India and Afghanistan will together use 45 mm cmpd annually.

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