Pakistan, India Agree on Gas Price Formula

Islamabad has agreed to a pricing formula for import of natural gas from India, Indian financial daily Economic Times reported Monday without providing details about the price.

A high powered delegation from India had visited Pakistan last month to discuss the pricing issue as all other modalities has been finalized. During earlier rounds of talks in New Delhi in March and April it was decided that officials from Gail India would visit Pakistan in the second week of August.

Gail India will source LNG from international suppliers, which will then be regasified at the LNG terminal at Dahej in Gujarat, for supply to Pakistan. The pipeline to be used to supply gas to Pakistan would start from western Indian state of Gujarat, would be built by Gail India.

 In 2012, India had offered to export up to 5 million cubic metres of gas per day to Pakistan for an initial period of five years. The two nations, however, had failed to fix a price.

"Gas pricing was the biggest hurdle, but it is finally settled. This will provide gas at an economical price to our neighbour once the pipeline operationalises", an Indian official told Economic Times.

Pakistan has been facing severe gas shortage due to increasing demand for electricity from households as well as industrial consumers. To fill the gap, the South Asian nation is trying to source gas from various sources. It is negotiating with Qatar for supply of  LNG however final price for the fuel is still an issue. Islamabad has also floated tender for LNG supply and according to reports in local media, 12 companies have put in their bids to supply the fuel.