Gas at less than $3 per mmbtu on the Indo-Pak border

Vol 5, PW 8 (06 Jun 01) People & Policy

Detailed plans are already under consideration over pipeline size and the quantities of gas that will flow through it.

First information suggests the pipeline - estimated to cost $3.2bn - will run for a total of 2,760-km from the Assaluyeh special economic zone in Iran, adjacent to the South Pars gasfield, across Sindh in Pakistan. From there it will cross into Rajasthan to hook up with the Hazira-Bijaipur-Jagdishpur gas pipeline and Delhi's insatiable appetite for gas.

Uncertainty surrounds the diameter size of the pipeline. Initially the Iranians wanted a 36-inch diameter.

Now it appears they favour a diameter size of between 42-48 inches. How much gas does Iran want to begin pumping to India About 2bn cubic feet a day, or 57m cubic metres a day.

That's the equivalent of approximately 14m tonnes a year of LNG, or three LNG terminals in Gujarat! How much will it cost The upstream cost of production will be between $0.40c-0.80c per mmbtu. An analyst tells Petrowatch that even after adding gas processing, insurance, transmission, and transit fees for Pakistan, the cost of the gas at the Indian border will still be below $3 per mmbtu - considerably lower than equivalent LNG or for that matter domestic gas being sold by Cairn Energy.

Next question: who will market the Iranian gas Reliance it seems, has already pitched its case to the oil ministry.