Pakistan, India to discuss construction of LNG pipeline

Islamabad and New Delhi are expected to discuss a plan to lay a pipeline from India to Pakistan for export of liquefied natural gas (LNG) in a meeting to be held in Islamabad in the first week of September. According to official sources, Pakistan and India, during the deliberations, will also touch issues of LNG pricing and transport facility. They said India was planning to expand its pipeline network for shipment of LNG across the border. The sources pointed out that India had already laid a pipeline network covering 100 km for transporting LNG to Bhatinda, from where the pipeline could be extended to Pakistan’s Wagah border to inject gas into the network of state-owned Pakistani energy giant Sui Northern Gas Pipelines Limited (SNGPL). Indian LNG trading company, Petronet Private Limited (PPL), has an LNG receiving and re-gasification terminal at Dahej in Gujarat state with original handling capacity of five million tonnes per annum (mtpa). The capacity of the terminal, which is meeting around 20 per cent of the country’s gas demand, was expanded to 10 mtpa in June 2009. The LNG price for the Dahej project is linked with Japan?s crude cocktail price. India may also link the price of gas for Pakistan with Japan’s price. PPL has a long-term contract with RasGas of Qatar for supply of 7.5 mtpa of LNG with back-to-back sales arrangement with GAIL India, Indian Oil Corporation and Bharat Petroleum. It has also made arrangements with Exxon Mobil’s Gorgon venture in Australia for supply of 1.44 mtpa. India also has an oil refinery in Bhatinda from where it desires to export oil to Pakistan as well. In this regard, Delhi has expressed interest in building a pipeline to Wagah on the border with Pakistan for supply of oil to Pakistan. An energy expert said Pakistan would have to use the option of pipeline if it wanted to import LNG from India. However, he suggested that Pakistan should first try to find out whether India was in a position to export gas in the face of shortages there. From gulftoday