Pakistan Signs Agreement on Power Import From Iran

Pakistan Signs Agreement on Power Import From IranPakistan Signs Agreement on Power Import From Iran

Anticipating the success of nuclear negotiations between Tehran and Washington, the National Electric Power Regulatory Authority allowed on late Tuesday signing of a formal agreement for the import of 1,000 megawatts (MW) of electricity from Iran at 8-11 rupees per unit, according to Dawn.

The state-owned National Transmission and Dispatch Company had sought permission to negotiate the agreement. The NTDC had signed a memorandum of understanding with its Iranian counterpart Tavanir for electricity trade on May 31, 2012.

The two companies had approved a feasibility study jointly prepared by Nespak (National Engineering Services of Pakistan) and MOSHANIR of Iran for electricity supply via Baluchistan.

A public hearing, presided over by Nepra Chairman Tariq Sadozai, was informed that the cost of high-voltage direct current (HVDC) interconnection project, including two converters-cum-inverters substations along with 500 kilovolts (KV) transmission line, had been estimated at $700 million, excluding the cost of 1,300 MW power plant needed to be constructed on the Iranian side.

Iran will construct the power plant from its own resources while Tavanir had offered to finance $265 million HVDC interconnection project in its own territory.

The tariff had been based on a floor of $65 per barrel crude oil prices and a ceiling of $110 per barrel. As a result, the minimum delivered power tariff would work out at 8 rupees per unit and a maximum of 11 rupees per unit. Pakistan has been importing about 74 MW from Iran for Baluchistan at the same tariff since 2007.

Responding to a question, the NTDC representatives said the difficulties arising out of international sanctions against Iran had blocked payments by the NTDC which have accumulated to $311 million till December last year.

It was reported that the two sides had been in talks for barter trade to adjust electricity payments to Iran but ways and means of payments were still being looked into. The due payments were being kept in a separate account for ultimate payment to Iran.

According to the NTDC, electricity would be imported through 500 KV double circuit transmission line capable of containing system losses below two per cent and tripping of one line would automatically shift power load to the other line, resulting in uninterrupted supply.

The cost of transmission line from Iranian border to Quetta had been estimated at $580 million.

Shabbir said Iran had offered to supply 3,000 MW to Pakistan. Iran also exports electricity to Turkey, Iraq, Afghanistan, Azerbaijan and Turkmenistan.

The US and its allies imposed tough sanctions on Iran to curb the country's nuclear program which they claim is geared to military use. Iran insists its program is peaceful. Iran and the P5+1 group ( five permanent members of the UN Security Council, namely United States, Russia, China, United Kingdom, and France, plus Germany) have been holding marathon talks over the past year to thrash out a mutually acceptable comprehensive deal.