Iran-Pak Gas Deal
Exactly as I suggested in my thesis, Indian intransigence over the IPI may well be opening the door to China. Moreover, it's more than likely that the current state of emergency in Pakistan will wipe out the IPI deal once and for all. What the article doesn't make explicit, however, is exactly how Iranian gas would transit from Gwadar to China other than by rail, which is not the most efficient method. Note also that an Abu Dhabi company is investing $5bn in Gwadar.
In a major development, Pakistan and Iran have crossed the last stumbling block in the way of a piped gas deal by agreeing on a pricing formula.
Both sides would review the gas pricing mechanism when there is a change in the co-relation between Japan's LNG and crude oil mix.
A high level delegation, headed by Secretary Ministry of Petroleum and Natural Resources Furrukh Qayyum dashed to Tehran to seal the gas sales purchase agreement (GSPA) with the Iranian authorities.
The technical and legal experts are to hammer out the landmark gas deal and both sides will technically finalize the deal after decisive talks by November 9 (today) in Tehran.
According to the officials, under the new scenario in the wake of India's evasive attitude as Indian experts did not participate in the recently held meeting in Tehran and the ongoing meeting in Islamabad, both Iran and Pakistan have decided to materialize the project.
"We have also asked Iranian authorities that the gas to be imported from Iran can also be exported to China as LNG (Liquefied Natural Gas) as the western part of that country has a shortage of energy", said the Pakistani official.
If it happens, then the project's economic viability would be enhanced.
The LNG terminal would be constructed in Gwadar and the piped gas would be converted into LNG for export to China through a proposed rail link from Gwadar to Xianjiang Province, China.
The Pakistan Ministry of Railways is studying the feasibility of laying the railways line from Gwadar to China.
The official concluded that Pakistan had also extended an offer to Iran to establish its own terminal in Pakistan.
