Agreement on Iran gas pipeline close: Pakistan

19 February 2007

Islamabad: Pakistan's prime minister Shaukat Aziz said the country was close to signing a pricing formula with India and Iran on building a much-delayed $7-billion pipeline to bring gas from Iran to South Asia.

Aziz told a gathering of oil and gas industry officials in Islamabad that the countries were very close to agreeing on the tariff. "We are in a very advanced stage and I think we are very optimistic," he said.

Aziz said he believed a gas pipeline from Iran through Pakistan to India was the easiest of several options to pipe gas to the sub-continent. A proposed gas pipeline from Turkmenistan through Afghanistan to Pakistan was also proposed in the 1990s, when the radical Taliban ruled the country, but this pipeline would have to pass through strive-torn Kandahar in Southern Afghan where Afghan and US-led NATO forces are still battling Taliban guerrillas.

A proposal to build the pipeline has been on the drawing board for years but have been delayed have prevented by uneasy relations between Pakistan and India.

Industry officials said the three countries are likely to sign an agreement on pricing in June, which would be based on a price framework suggested by a British consultant Gaffney, Cline and Associates, which has recommended linking the gas price to the average of the six-month Japanese crude basket preceding the month of delivery.