Ministers meeting on IPI pipeline likely in July

Petroleum Minister Murli Deora met Iran's Oil Minister Gholam Hosein Nozari on the sidelines of a meeting of world oil producers and consumers in Jeddah on Sunday, and agreed to a trilateral meeting in Tehran next month.

"Most of the bilateral issues have been resolved... And now a trilateral meeting of oil ministers of the three countries is mostly likely to take place in Tehran next month," said Petroleum Secretary M S Srinivasan, who was present during Sunday's meeting with Nozari.

External Affairs Minister Pranab Mukherjee is also scheduled to visit Iran at the end of the month. Discussions on the pipeline are also on his agenda.

During the last trilateral meeting in June last year, India and Pakistan had agreed on the basis for calculating the transportation fees for India's share of the gas that would travel through Pakistan. The two countries, however, could not agree on the transit fee, which India would have to pay Pakistan for ensuring safety of the gas in Pakistan.

During last year's meetings Iran had also wanted to introduce a clause in the agreement that would allow it to revise the price of the gas every three years. India and Pakistan had opposed that move.

Iran officials had later said that both Pakistan and India had agreed "in-principle" to the price revision clause "as it was a global practice to have such clauses in gas contracts."

Srinivasan today said the transit fee issues with Pakistan were settled when Petroleum Minister Murli Deora had visited Islamabad in April this year. He added that there were a few issues with Iran that India wants to settle at the trilateral meeting in Tehran.

India wants Iran to hand over custody of the gas at the India-Pakistan border rather than the Iran-Pakistan border as had been suggested by Tehran.

"We want to ensure security of the gas through Pakistan and by taking delivery of the gas in the Pakistan-India border, we make Iran and Pakistan responsible for our share of the gas as well," said an official in the petroleum ministry. The pipeline is initially planned with a capacity to carry 60 million cubic metres per day (mcmd) of gas, of which 30 mcmd is India's share. This is around 33 per cent of the total gas currently available in India.

Government officials however are not very confident that the $7.5 billion deal will be signed any time soon. Officials say that safety has to be ensured before such huge investments can be made. "Iran is a tough negotiator, and it takes a lot of time to get a deal through," said the petroleum ministry official. "Also the threat of the US attacking Iran always exists," he added.