India-Pakistan LNG delivery agreement still to be forged

November 2
12:33 PM 2013

India had sought sovereign payment guarantees from Pakistan before it can enter into an agreement for the export of natural gas through a pipeline from Punjab. The state owned gas utility GAIL India Ltd as it planned to supply an initial five million standard cubic meters per day of gas to Pakistan. The delivery would be done through a 110 km pipeline from Jalandhar to the international border near Atari.

Before GAIL India can enter into a gas supply contract with any firm from Pakistan, New Delhi seeks payment guarantees from Karachi. This was reported by sources privy to the negotiations being conducted between India and Pakistan.

There have been five rounds of negotiations conducted between the two countries after it had found it would be technically feasible to export gas between Punjab and Lahore. Aside from sovereign guarantees, India wanted sureties for three months of payments and advance termination commitments according to the sources.

GAIL India seeks to import gas in its liquid form called LNG or liquefied natural gas either from Gujarat or Maharashtra. It would then be converted into gaseous state to be passed through a cross country pipeline network to Jalandhar. From Jalandhar, the gas would be run through a 110 km pipeline laid until the border in Atari for eventual delivery to Pakistan.

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