Pakistan likely to buy Iranian LPG in PKR as Tehran gives nod to proposal
Jul 25, 2022
Islamabad [Pakistan], July 25 : Ahead of the 21st session of the Pak-Iran Joint Economic Commission (JEC) which is scheduled to be held from August 16-19 in Islamabad, Pakistan may buy liquified petroleum gas (LPG) from Tehran.
Pakistan's purchase of (LPG) from Iran will take place in Pakistani rupees as Tehran is ready to consider Pakistan's proposal, well-informed sources in Commerce Ministry told Business Recorder.
"Both sides have emphasized their commitment towards the early solution of IP project under GSPA and agreed to take necessary measures," the sources said, sharing details on the Pak-Iran Gas pipeline.
The 21st Session of the Pak-Iran Joint Economic Commission (JEC) will take into consideration the issues of the Pak-Iran Gas Pipeline, joint projects between OGDCL, National Oil Refinery (NIOC) and pending issues between NTDC, CPPA-G and Iranian company Tavanir, in addition to the promotion of barter trade and payment mechanism.
According to sources, OGDCL has expressed the desire to work as a joint venture partner with NIOC for the exploration of hydrocarbons within Iran and worldwide, Business Recorded stated, adding that ODGCL would also like to join hands with National Iranian Oil Company to evaluate the potential of tight gas reserves, and enhanced oil recovery projects in Pakistan.
However, due to US sanctions, no cooperation could materialize so far.
Moreover, WAPDA and TAVANIR also entered into a contract agreement for 30 years for 32-MW electricity on November 6, 2002, to fend the requirements of Makran Division in Balochistan and TAVANIR showcased an interest to supply power to other bordering areas. Somehow, the rates per kWh were revised from time to time and MoU was signed on April 08, 2007, for the import of 1000-KW power from Zahedan, Iran to Quetta, Pakistan, stated the sources.
NTDC approved the MoU in 2012; however, the approval of ECC is awaited. After approval of ECC, the PPA will be negotiated with Tavanir. The estimated cost will be USD 700 million.
CPPA-G has noted that as of September 17, 2020, payment of about USD 100 million to Tavanir on account of import of electricity is pending due to non-availability of banking channels, Business Recorder reported citing sources, stating that NTDC had earlier requested M/o Commerce to develop some formal mechanism for making outstanding payment owed by CPPA-G to Tavanir.
Notably, during the visit of the Prime Minister of Pakistan to Iran in April 2019, it was agreed that the legal teams from both sides would engage in finding out legal solutions for the implementation of the project. Accordingly, both sides executed Amendment Agreement No. 3 to the Iran Pakistan Gas Sales and Purchase Agreement (IP-GSPA) with NIOC on 5th September 2019 in Istanbul, Turkey.
