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India, Pak to discuss pipeline next month

world Updated: Apr 16, 2007 15:37 IST

PTI
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Petroleum Minister Murli Deora would visit Pakistan early next month to sort out differences over transit fee for the $7 billion Iran-Pakistan-India (IPI) gas pipeline.

The transit fee remained a thorny issue between the two countries despite an agreement to share quantum of gas from the IPI pipeline, local daily Dawn reported.

The two sides would discuss the issue at the ministerial-level meeting early next month, it quoted Pakistani officials as saying.

Deora has already discussed the transit fee issue at length during his meeting with Pakistan Prime Minister Shaukat Aziz on the sidelines of SAARC summit in New Delhi early this month during which he reportedly conveyed India's reservations over "high charges" being quoted by Islamabad.

According to officials, Iran wants to sell natural gas to India and Pakistan at 4.93 dollars per million British thermal unit (at 60 dollars per barrel crude oil price).

On top of this, Pakistan wants a transit fee of 0.49 dollars per mBtu (10 per cent of the gas price) and a transportation tariff of 1.57 dollars per mBtu, making the delivered price of gas at India-Pak border seven dollars per mBtu.

Pakistani officials said Islamabad had sought 10 per cent of the gas price as transit fee to deliver the gas at Pakistan-India border to provide right of way, security and safety to the pipeline as well as taxes and other expenses.

At current oil prices, Pakistan expects transit fee at or around 50 cents per mBtu while India offered 15 cents per mBtu.
India wants Pakistan to take into consideration the fact that Islamabad would also utilise the gas from the same pipeline and any calculation of transit fee should take this into consideration.