ISLAMABAD - The recent historic deal between the world powers and Iran over its nuclear programme has prompted a sharp reaction across the country as politicians and intelligentsia are very optimistic about materialising Iran-Pakistan gas pipeline project which could lessen energy shortage in the country, but experts are not so hopeful.

The first reaction came from former president Asif Ali Zardari who called upon the government to seize the moment and translate the dream of the Iran-Pakistan gas pipeline project into a reality.

“The nuclear deal opens the doors for the Iran-Pakistan gas pipeline project to overcome our lingering and crippling energy crisis ,” said Zardari in a statement.

In March 2013, Zardari inaugurated the multi-billion dollar Pak-Iran gas pipeline project which was later halted on the US pressure. The US publicly threatened to invoke economic sanctions, already in place against Iran, if Pakistan went ahead with its plans to import natural gas from the neighboring republic.

After the deal when Iran-Pakistan gas pipeline is once again under discussion, the experts highlight many challenges which need to be addressed before pinning any hope of overcoming the prevailing power crisis in the country in any short span of time.

Iran has completed its side section by laying a gas pipeline from Pars field to Chah Behar, but Pakistan has to kick off the project, said Mari Gas General Manager (Operations) Javed Iqbal Jadon.

He said pre-project preparations and construction are time-consuming. “Graphic survey route and land acquisition process are time-consuming. Though consultants are working on pre-project developments, the speed is slow. He said it could take 4-6 months before starting construction while construction may take years.

The construction phase solely depends upon how much resources are allocated and how much financial and human resources gas distribution companies, SNGPL and SSGC, can spare for the project.

Some experts believe Pakistan and Iran have still to address some basic challenges, including pricing, to make the project profitable for both the countries.

The present pricing formula of gas import from Iran is based on Japan Crude Oil Cocktail which is very expensive, said Engineer Arshad Abbasi, author of the report, titled, “Rethinking Pakistan’s Energy Equation, Iran Pakistan Gas Pipeline”.

He said the prices should be linked to gas as per Henry Hub which is the world’s renowned benchmark for setting gas prices. He further said the price as per the present cost is very high and it would not be feasible to generate electricity from the imported gas.

Pakistan is presently importing gas from Iran. But the cost of power generation is even higher than producing electricity through furnace oil.

According to the Central Power Purchasing Agency’s generation data for the month of May 2105, 42.74 GWh was produced against the gas worth Rs 435.93 million.

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Per unit cost of electricity production from the imported gas was calculated at Rs 10.20 whereas cost of generating electricity from Furnace oil (RFO) was Rs 9.92. –ATIF KHAN