ISLAMABAD, Pakistan, Feb. 23 (UPI) -- India and Pakistan on Friday agreed to share gas from Iran, but there was still no understanding on transportation and transit costs.
At the end of the two-day meeting between the two sides in Islamabad, Pakistan's Petroleum Secretary Ahmad Waqar said the two countries agreed to receive 60 million standard cubic meters of gas per day and share 30 mmscmd each in the first phase. The rest would be shared in the project's next phase.
"We have agreed to complete documentation and we will be able to sign the final document by June 2007," he said.
He said Pakistan agreed in principle to the formulation of transportation costs involved in carrying the gas from the Iran-Pakistan border to the Pakistan-India border.
"We agreed with India (on the formulation). However, final tariff will be based on actual technical and financial inputs to be worked out by officials in coming weeks," he said.
There was no understanding, however, on transport and transit fees.
Indian Petroleum Secretary M.S. Srinivasan said Pakistan's proposed tariff was up to2 ½ times more that what is usually applied to similar distances. And on transit fees, Pakistan wanted 57 cents per million British thermal unit, while India said it will pay 15 cents per mBtu.
The $7 billion pipeline would run from Iran to India via Pakistan. The South Asian rivals both have rapidly growing economies and need the energy to fuel economic growth. The United States opposes the deal because it says it will embolden Iran, which is facing international scrutiny for its nuclear program.
The IPI pipeline, as it is known, also faces other hurdles, including financing. It is unclear if the political situation in the region is stable enough for the pipeline to receive funding from international institutions.
