India offers to meet Pak's oil needs
New Delhi   30-May-2012

India has offered to build a pipeline to the Wagah land border and supply 50 million tons of petroleum products a year to meet Pakistan's requirement, according to media reports today.

The offer was made during talks yesterday between a visiting Indian delegation led by Mr. P Kalyanasundaram, director (international cooperation) in the Indian petroleum ministry, and a Pakistani team headed by joint secretary Shabbir Ahmed. The Indian team also met petroleum minister Asim Hussain, who said Pakistan is interested in importing furnace oil and diesel.

India offered to build a pipeline to the Wagah border to export oil to meet all of Pakistan’s needs if New Delhi is assured of purchases in large quantities over the long run, The Express Tribune quoted its sources as saying. Officials said Pakistan can get oil supplies from India at prices that are 30 per cent cheaper because of low transportation costs. The News reported that India had come up with a “surprise offer” to cater to all of Pakistan's petroleum needs by exporting 50 million tons of POL products per annum.

An unnamed Pakistani official told The Express Tribune that the two countries were expected to sign a memorandum of understanding relating to import of oil and liquefied natural gas (LNG) from India.

During the first day of technical-level talks in Islamabad yesterday, the Pakistani team expressed the desire to import all petroleum products, including high-speed diesel, furnace oil, petrol and jet fuel. At the same time, Pakistan offered to export naphtha, a surplus product, to India so that it could be converted into petrol and re-exported to Pakistan. Besides laying an oil pipeline to the Wagah border, the two sides discussed the possibility of oil being shipped by sea to meet the demand in southern Pakistan.

Pakistani authorities believe the import of LNG from Qatar and other countries like Malaysia would take three years, while India might start supplies in six to eight months, an official said.

India has a refining capacity of 250 million tons of petroleum products per annum while Pakistan's refining capacity stands at 20 million tons a year.