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| India has no plan to shelve IPI gas pipeline |
| Kalpana Pathak / Mumbai May 26, 2009, 01:20 IST |
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In discussions with Iran, Pakistan
The Indian government, said a senior official, wishes to take talks foward on the $7 billion Iran-Pakistan-India gas pipeline project.
This was a day after Iran and Pakistan were reported to have signed on the pipeline agreement.
India is in discussion with Iran (on the gas price revision clause) and with Pakistan (on transport cost issues) to resolve the issues impeding a deal.
“We are very much interested in the pipeline,” said a senior official from the ministry of petroleum and natural gas.
India has been part of the 2,775-km pipeline project for over a decade, but did not participate in a critical meeting held on the issue in October last year, where officials from Iran and Pakistan discussed the project cost and new gas pricing formulae.
“We are always looking for sources of gas to ensure energy security. However, while we would want gas security, we do want it at a reasonable pricing,” the official added.
India needs to resolve its issues with Pakistan — including security of the pipeline — before moving on to the issues with Iran.
“Before discussing other issues, resolving the issue of transit fee and transportation cost is important,” an official said.
Iran, Pakistan and India had earlier mutually agreed to a price of $4.93 per million British thermal unit (mBtu) for the gas from the South Pars field in Iran.
Analysts say with India having to pay a transportation charge to Pakistan, the price could go up to a high of $8-10 per mBtu.
In the past, there have been reports that India could opt out of the project, with Iran and Pakistan bringing in China as a possible third partner. However, the ministry official denied any such proposal.
“Considering the route, it is impossible that China could be a part of this project,” the official added.
India is likely to receive an estimated 30 million cubic metres of natural gas per day (mcmd) from Iran, if the agreement comes through.
Reuters reported last week that officials from Teheran and Islamabad had signed an agreement on exports of Iranian natural gas. Iran would deliver an annual 8 billion cubic meters of gas to Pakistan under the agreement.
Iran has the world’s second-largest gas reserves after Russia. But sanctions, politics and construction delays have slowed its development, and analysts say Iran is unlikely to become a major exporter for a decade.
The construction of the Pakistani part of the pipeline would take three to four years.
Under the original plans, the pipeline would initially carry 60 million cubic metres of gas daily to Pakistan and India, half for each country. The pipeline’s capacity would later rise to 150 million cu metres.
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