Pakistan and Iran currently are in a dispute over the gas price, an obstacle to further progress on the 2,775-kilometer IPI gas pipeline project. The IPI is expected to cost Dlrs 7.5 billion.

The Senate Standing Subcommittee on Petroleum and Natural Resources discussed progress of dialogue process on IPI and the upcoming visit of the Iranian delegation, officials said.

Senator Talha Mehmood, who chaired the meeting yesterday, told reporters that Pakistani officials would hold more talks with Iranians over IPI gas pricing formula.

He requested the Iranian government to offer Pakistan gas on easy terms and conditions.

The meeting was informed that Iran had laid around 700km gas pipeline on its soil for the IPI project but Pakistan had yet to start work on it due to delay in finalization of gas pricing formula.

Advisor to the Prime Minister on Petroleum Dr Asim Hussain, who recently visited Tehran, said Indian price was cheaper than Pakistan's because local companies carried out exploration and production works in the neighbouring country.

Officials told the subcommittee that Iran had offered gas supply on 78 percent crude oil parity and that Iranian gas is also affordable for power generation.

The officials said the IPI 1-bcfd gas was 15 percent cheaper than the one produced by furnace oil.

Pakistan plans to import 2.2 bcfd of gas from Iran, of which Pakistani share would be 1.05 bcfd. If India does not participate, Pakistan would take the entire volumes, officials said. The officials further said Iranian gas would later be supplied to European countries.

They said Iran finalized gas deal with Pakistan in 2006 but a delay is being caused due to pricing formula for gas.