India has threatened to walk out of the seven billion dollar Iran-Pakistan-India gas pipeline project if Islamabad did not bring down the fee it wants to charge for allowing flow of natural gas from Iran to India.
At the beginning of the two-day technical level talks here on the project, Indian officials told Mukhtar Ahmad, energy advisor to the Pakistan Prime Minister, that transportation tariff for the 1036-km pipeline section falling in Pakistan and the transit fee payable to Islamabad has to be brought down for New Delhi to continue in the project.
“Transportation tariff and transit fee impunge on delivered price of gas,” a top Indian official said.The official said New Delhi, drawing from experience in international pipeline projects, has suggested a transportation tariff of 0.50 dollars per million British thermal unit while Pakistan wants 1.57 dollars per million British thermal unit(mBtu).
Islamabad is seeking a transit fee of 10%of the gas price at India border (price payable to Iran plus transportation cost) while India is willing to pay a maximum of 5 % of the gas price at Iran-Pakistan border.
“It is a question of 0.65 dollars per mBtu versus 0.25 dollars per mBtu but when taken together with transportation tariff, the price of gas at Indian border will be almost 1.50 dollars per mBtu costlier,” the official said.
After meeting Petroleum Minister Murli Deora and Oil Secretary M S Srinivasan, Ahmad said: “We are very hopeful that we will converge on all the issues” and a tripartite deal will be signed in June.