TAPI gas pipeline project: India, Afghanistan agree on transit fee

ISLAMABAD: Petroleum Minister Dr. Asim Hussain announced that Afghanistan and India have agreed on a transit fee of 49.49 US cents per MMBTU for Turkmenistan- Afghanistan-Pakistan-India (TAPI) gas pipeline project, and the final agreement in this regard will be signed on May 24.

Addressing a news conference here on Friday, the minister said that the price agreement between India and Afghanistan was made possible due to Pakistan’s efforts, adding, “We played a major role in convincing both the countries.”

The minister said that Pakistan will be charging the same transit fee from India as agreed with Afghanistan.

He said that all the downstream issues of the TAPI pipeline were settled and the upstream issues will be settled at the steering committee of the project on May 24 when final agreement will be signed by the four participating nations.

When asked about the price of imported gas, he said that it could not be shared with the media and said that it was less that the price for Iran Pakistan (IP) gas pipeline.

He said Pakistan will be negotiating a revision in gas price with Iran as there is a price renewal clause in the agreement, adding that it will result in saving $ 1 billion.

The minister said the engineering, procurement and construction (EPC) contract for IP will be awarded next week. He said that Pakistan’s stance is very clear on the IP gas pipeline.

He said orders have been issued to the Pakistan State Oil for setting up 100 LPG auto stations across the country at its outlets within next three months, adding that the dealers will be bearing all the construction cost. PSO will ensure LPG supply to the dealers and its price will be totally deregulated, the minister added.

He said that the motorists will enjoy LPG, as it contains more hi-octane than CNG, adding that there will be no significant difference in LPG and CNG prices as estimated LPG mileage is Rs 6 per km, while that of CNG is Rs 5 per km as compared to petrol’s Rs 9.50 per km.

About ending of the energy crisis, the minister admitted that it would require at least three to five years in overcoming the crisis. However, he said that the government has taken decision to put the energy sector on the track again.

About LNG, he said that the suppliers want long-term agreements of up to 10 to 15 years instead of 3 to 5 years duration. The cost of short-term supplies will be double than the long-term supplies. He said that he has already visited Algeria and talks were held on LNG supply, which they assured could be provided if an agreement on government to government basis was signed. He said that a summary was being moved to ECC for final decision.

Replying to a query pertaining to the violation of rules in appointment of Chairman Oil and Gas Regulatory Authority (OGRA), the minister said that the question should be asked to the Cabinet Division that made the appointment. Prime Minister has approved appointment of a retired bureaucrat Saeed Ahmad Khan as Chairman OGRA even though the post required 20 years experience in oil and gas sector.

About the high unaccounted for gas (UFG) losses, he said the Sui companies have reduced it from 15 percent to less than 10 percent, but these should be further brought down to below 5 percent.