Pakistan to renegotiate gas deal with Iran

ISLAMABAD: Pakistan has decided to re-negotiate the gas deal inked with Iran under IP gas pipeline project during last era of Pakistan People’s Party and to this effect Ministry of Petroleum and Natural Resources has sent a summary to ECC seeking the approval of renewal of committee that will start talks with Tehran.

And to this effect Pakistan will send its team to Tehran sometime in the current month to open the talks for re-negotiating the gas deal.Ministry of Petroleum and Natural Resources is of the view that the Gas Sales Purchase Agreement (GSPA) earlier inked with Iran under IP gas pipeline needs to be reviewed as the price done under GSPA is at higher side and the price of LNG is currently less than the price that has been signed with Iran.

“We will not abandon the deal with Iran at any cost. However, we want to review the price of gas and some other clauses mentioned in GSPA,” the top official of the Ministry of Petroleum and Natural Resources told The News arguing that Pakistan wanted to invoke the clause under which both countries could re-negotiate the price one year before the first gas flow.

Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi confirmed that the ministry sought the renewal of the committee that was established five years before with an aim to negotiate the GSPA with any country. Every year the committee’s renewal is inevitable. The minister said that keeping in view the changing dynamics of the gas and oil markets, Pakistan needs to re-negotiate the price of gas to be imported from Iran under IP gas pipeline project that has got delayed for many years mainly because of the sanctions imposed by the US and the EU.

The minister says that the PPP government had ceased the deal with Iran at higher side owing to which the price of gas to be imported from Iran would now stand at $8 MMBTU against the LNG price of $6 per MMBTU that is delivered at Nawabshah.

Ministry says that Pakistan will never abandon the deal with Iran. However, there are two sanctions which are still there and when they are to be waived, Pakistan will have no option but to import the gas from Iran. And if Pakistan does not purchase the gas, Iran will move international court for arbitration, resultantly Pakistan will have to pay huge penalty.