'Ready to face sanctions over gas project'
07 March, 2013
ISLAMABAD: Advisor to PM on Petroleum, Dr. Asim Hussain has said that Pakistan is ready to face any kind of US sanctions over Pak-Iran gas pipeline project, Our Sources reported.
Speaking to media after signing an accord between OGDCL and fertilizer companies here, Dr Asim said Pakistani economy was under pressure, adding every measure would be taken to secure it.
The advisor said agreement would also be inked with Iran for establishing 400,000 barrel per day capacity refinery in Gwadar.
US sanctions may derail plan of oil import from Iran
Pakistan fears that sanctions imposed on Iran by the United States and the European Union (EU) may derail the plan of furnace oil import on long-term deferred payment from Tehran.
Sources told Our Sources that the Pakistani team expressed reservations during a meeting held in Tehran on February 27 that financial transactions by banks in import of furnace oil from Tehran will cause problems for Pakistan.
However, sources said that the team of the National Iranian Oil Company (NIOC) assured Pakistan that petroleum and finance ministries of both the countries will discuss the matter and work up a solution.
The meeting in Tehran was the follow up of Iranian offer to export large quantity of fuel on a long term deferred payment method to meet the full demand of the power sector to help ensure an uninterrupted supply and mitigate its economic woes.
At present, the power sector hardly maintains furnace oil stock to meet a day's requirement of power plants against the mandatory reserves for 21-day coverage.
The power sector requires 35,000 tons per day of furnace oil to operate thermal power plants at full capacity. An official of the Ministry of Water and Power said the average requirement of the power sector was a million tons of furnace oil a month, of which about 250,000 tons was produced locally.
“So, if the deal materialises, Pakistan will be importing 750,000 tons per month of furnace oil from Iran,” official said, adding that this move may deprive other Middle East countries of the Pakistani market.
Sources said that Iran had offered to provide furnace oil of 280 centistoke (cst), which was not being used in Pakistan presently. Iran was also exporting 380 cst grade fuel to the world market.
The government also plans to introduce a new grade of 380 cst furnace oil by local refineries for which detailed specifications will be finalised soon,” official said, adding that it will pave way for Iranian import of fuel to Pakistan. The furnace oil with 380 cst grade is also cheaper than the existing grades.