ISLAMABAD - Pakistan’s growing energy needs can substantially be met through import of gas from Iran through Iran-Pakistan gas pipeline project. However, there is a need to re-evaluate the gas pricing mechanism for the purpose. 

This was stated by Dr Abid Suleri, Executive Director, Sustainable Development Policy Institute (SDPI) at a press conference held here at SDPI office on the Tuesday. The press conference came as a follow-up to the recent statement by Hamid Raza, Managing Director of National Iranian Gas Company (NIGC), suggesting that the gas price has not yet been fixed and can be changed.

With regards to the government’s fear of sanctions being imposed on the country if Pakistan is to sign a deal on import of gas from Iran, Dr. Suleri pointed out that Iran is already exporting gas to other countries including Turkey and Armenia. Answering questions from media representatives, he further added that funding options for the project would be more secure if a sovereign bilateral agreement is reached and signed between Iran and Pakistan. Pakistan can also explore the option of exporting wheat to Iran in exchange for gas from the latter. On concerns regarding India blocking an Iran-Pakistan gas deal, he said that India is an emerging economy with higher energy needs; if a gas pipeline materialises between Iran and Pakistan, it can also be extended to India in future.

Arshad Abbasi, at SDPI, said that SDPI’s study on the Iran-Pakistan gas pipeline has played an important role in generating a policy debate on the issue. He added that the report was reviewed by independent experts and requested all concerned stakeholders, including government, academia, media and intelligentsia to come forward and contribute towards a policy framework particularly in the context of Pakistan’s pressing energy needs. He further emphasised the need to de-link the price of gas from that of oil in international markets, particularly considering Iran’s willingness to reconsider gas pricing for Pakistan.

Shaukat Hameed Khan, VC Center for CASE, said that drilling options have still not been fully explored and utilised in Pakistan. This is all the more important in so far as off-shore drilling is concerned. The number of wells drilled in the country is already too low, despite Pakistan’s persistent energy crisis. He called for reform not only in the OGDCL but also in the OGRA in Pakistan. He also opined that the IP project can generate economic activity in the less privileged areas of Balochistan.

Saad Saleem, Managing Director NayaTel, observed that there was need to dispel the notion that energy prices are completely linked with international oil prices, which, in turn are linked with movements in the US dollar.

Given security and other complications that can emerge with the execution of a gas pipeline project between Iran and Pakistan, the latter can also consider overhead lines for import of electricity itself to meet domestic needs.