India willing to lay pipeline to further its oil export to Pakistan

India willing to lay pipeline to further its oil export to Pakistan

Monday, May 28, 2012: India has offered to build a pipeline from its territory to the Wagah border for export of oil to meet all needs of Pakistan, considering Delhi is assured purchases in large quantities over the long run.

If such a move is accepted it will deprive energy-rich Gulf countries of a lucrative market.

Pakistan believes that it can get oil supplies from neighbouring India at 30% cheaper prices because of low transportation cost, say officials.

A government official, who chose to stay anonymous, said that Pakistan and India were likely to strike a deal with the signing of a memorandum of understanding on the concluding day of two-day talks on Tuesday relating to import
of oil and liquefied natural gas (LNG) from Delhi. “India has told us that it has a surplus capacity of 50 million tons of oil,” he said.

During the first day of technical-level talks between the two countries in Islamabad, the Pakistani team expressed the desire that it could import all petroleum products including high-speed diesel, furnace oil, petrol and jet
fuel from India to meet domestic requirements.

In a unique proposal, Pakistan offered export of naphtha – a surplus product – to India, which Delhi would convert into petrol and then re-export it to Pakistan. “India also needs naphtha for its industries,” the official said.

“The two sides will finalise the prices of petroleum products and transportation charges today (Tuesday),” a participant of the meeting said.

Besides laying an oil pipeline to Wagah, “we can also ship oil through sea route to meet the demand of southern parts while tankers may also be used in this regard,” the official quoted the Indian side as saying.

However, Pakistani officials looked not interested in oil supplies through tankers, believing it would prove expensive. However, import of oil through ships was considered cheaper, but the pipeline was described as the cheapest
option.

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Posted by Wajahat Javed on May 29 2012. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry