US enticing Pakistan with cheap gas

0
Press Tv
An article published by the International Herald Tribune says Washington is trying to lure Islamabad away from the Iran-Pakistan (IP) gas pipeline project by offering cheaper gas to the country.

The article says the US has stepped up efforts to lobby Pakistan to abandon not only the IP gas pipeline project, but also liquefied natural gas (LNG) purchases from its western neighbor in return for cheaper gas from US.

“The US embassy officials [in Islamabad] held a meeting with stakeholders from the [country’s] power and energy sector last Tuesday to seek input on Pakistan’s current LNG import and IP gas pipeline projects,” the paper said.

Following the meeting, a US Embassy official was quoted as having told Pakistani officials that Iran’s gas would not be affordable for Pakistan.

“Iranian gas will cost USD12 per million British thermal units (mmbtu) while LNG would cost USD18 per mmbtu,” the officials said, adding that the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline was the most viable option for Pakistan financially.

The report also quoted unnamed sources as saying that officials from United States Agency for International Development (USAID) have taken part in a meeting at Pakistan’s petroleum ministry to indicate that LNG could be made available by the US at USD 4.5 per mmbtu.

According to the International Herald Tribune, the price of LNG was USD4.5 per mmbtu four to five years ago but shot up due to rising LNG demand in Japan following the recent earthquake.

American energy companies, said an energy expert, have increased gas supply in recent years causing natural gas prices to fall 5.7% on January 12, 2012, to their lowest level in over two years.

The multi-billion-dollar Iran-Pakistan gas pipeline deal, which was signed in June 2010, aims to export a daily amount of 21.5 million cubic meters (or 8.7 billion cubic meters per year) of Iranian natural gas to Pakistan.

Maximum daily gas transfer capacity of the 56-inch pipeline which runs over 900 km of Iran’s soil from Assaluyeh in Bushehr Province to the city of Iranshahr in Sistan and Baluchestan Province has been given at 110 million cubic meters.

The project was originally known as the Iran-Pakistan-India (IPI) pipeline project. Iran, India and Pakistan held tripartite negotiations over the project, which was also known as ‘The Peace Pipeline,’ until New Delhi’s vacillation caused Tehran and Islamabad to continue talks bilaterally.

New Delhi finally left the trilateral talks over disagreements with Islamabad on issues such as the fee Pakistan would charge India for the gas transit.

In October 2007, Iran and Pakistan began a new round of talks in Tehran, where the details of the deal were finalized.

Iran has already constructed more than 900 kilometers of the pipeline on its soil.

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