Pakistan and Iran will sign a gas sales and purchase agreement (GSPA) for their cross-border pipeline project next week, following a clearance by the Economic Coordination Committee (ECC) on Tuesday, the caretaker minister for petroleum and natural resources, Ahsanullah Khan, said at a news conference on Monday.
“The implementation agreement for the project would be an inter-governmental sort of agreement and would be signed soon by the heads of states.”- the caretaker minister for petroleum and natural resources, Mr Ahsanullah Khan
He said the gas price finalised for the project, on the basis of the Japan Crude Cocktail (JCC), would be 40 per cent less than the current furnace oil prices and cut the oil import bill by about one billion dollars.
He said three options for pipeline diameter were currently under consideration — 36 inches, 42 inches and 56 inches — and would depend on India’s decision to join the project or otherwise.
Mr Ahsanullah said Pakistan would welcome Indian participation in the project at any stage, but clarified that New Delhi had not given “clear response” so far.
Mr Ahsanullah said that Wapda signed some contracts of “undesirable” dimensions with rental power stations, without any authorisation and after gas disconnection, these power plants had to be shut down, aggravating the power crisis.
He said the overall gap between supply and demand stood around 25 per cent, or about one billion cubic feet, against a production of 3.90 BCF. The domestic gas consumption had increased by 60 per cent this year.
He said gas companies had made a number of measures to ease electricity shortages including the diversion of additional gas quantities as well.The petroleum secretary said that most of the exploration and production companies operating in Pakistan, almost 70 per cent of whom hailed from China, had been affected by the law and order situation.