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Wed 2 Aug 2006 04:00 AM

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Qatar makes LNG offer to Pakistanis

Qatar has offered to supply oil and gas to Pakistan on favourable terms if Islamabad abandons the Iran-Pakistan-India gas pipeline project.

Qatar has offered to supply oil and gas to Pakistan on favourable terms if Islamabad abandons the Iran-Pakistan-India gas pipeline project, according to media reports.

Qatar, which is a close US ally, is the base for the US Air Force’s Arabian Gulf HQ. It also aims to supply the United States with liquefied natural gas (LNG).

The Qatari oil facility is a typical “American carrot for Pakistan to keep it away from transnational project of Iran-Pakistan-India gas pipeline,” an unnamed Pakistani official was quoted as saying by The Nation newspaper.

The Pakistani official said his country faces an energy crisis due to its rapid economic growth. It cannot wait for a controversial, lengthy and expensive pipeline, which is opposed by Washington, to be built, he said.

“Even if one of the proposed pipelines kick-starts today, it could not be ready by 2009-2010, while the situation on ground indicates no chance of any pipelines materialising within the next three years,” he said.

In a separate development, which would make the Qatari offer look even more attractive, Iran ruled out last month any possibility of supplying Pakistan with gas at a discount.

Due to global demand boosting prices, Iran will not discount the price of its natural gas for the proposed US $7.4 billion pipeline to Pakistan and India, said Hadi Nejad-Hosseinian, Iran’s deputy oil minister for international affairs.

Other consumers are willing to pay a “heavy price’’ for the Iranian gas, Nejad-Hosseinian told Petroenergy Information Network, the oil ministry’s press agency. He said Iran will not be able to satisfy the demand of European and South Asian customers and will have to choose whom it supplies.“If we want to export to both destinations, then we will have to cut the volume,’’ Nejad-Hosseinian said.

Europe is asking for 100 million cubic metres (cm) of gas a day, while India and Pakistan need 150 million cm of Iranian gas, he said.

India and Pakistan have agreed to start building the pipeline in 2007, although they have not said who will fund it. The United States opposed the project to isolate Iran, which it says is trying to make nuclear weapons.

Iran, however, is determined to become a major player in the world gas market and Tehran is seeking to increase its supplies to the European Union via Turkey through the planned “Nabucco” pipeline. And the EU is equally as keen to bypass Russia.

A group of companies, led by Austria’s OMV, plans to spend $5.8 billion to build the pipeline linking Western Europe to the Caspian Sea and possibly Iran and Iraq. The Nabucco pipeline is due to open in 2011.

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