Pak, Iran sign pipeline pact; India left out

In an apparent bid to push India out of the proposed tri-nation gas pipeline project, Pakistan and Iran have agreed to lay a bilateral gas pipeline with 33 per cent higher supplies to Islamabad.

The agreement would make it difficult for India to remain a part of the multibillion dollar tri-nation Iran Pakistan India (IPI) gas project due to capacity constraints.

Pakistan has increased its off-take of gas from the pipeline from 2.1 billion cubic feet per day (bcfd) to 2.8 bcfd, making it difficult for the pipeline to accommodate India's demand, as the capacity of the proposed 2,600 km long pipeline is only 3.2 bcfd.

In view of this, Iranian deputy oil minister Hadi Nejad Hosseinian and Pakistan's petroleum secretary Ahmad Waqar said at a joint press conference here yesterday that India could be accommodated through a second pipeline if it was interested in going ahead with IPI.

"Iran agreed to enhance off-take volumes for Pakistan from 2.1 bcfd to 2.8 bcfd in case the project is implemented bilaterally," the joint statement issued at the end of three day talks said.

As per the earlier arrangement, India was to draw two thirds of the gas while the remaining one third was to go to Pakistan. In the past, the three sides had considered the option of laying a 56-inch pipeline with a capacity to carry 150 million standard cubic meters of natural gas from the Persian Gulf to Pakistan and India everyday.

"The JWG examined in detail various financial, commercial, technical and legal aspects of the project. Major issues discussed in the working group meeting included gas pricing formula, project structure, project feasibility, gas off-take volumes and gas sales & purchase agreement," the statement said.

Asked where India fit in the project as most of the pipeline's capacity would be utilised by Pakistan, Hosseinian said the three sides would discuss the possibility of a second pipeline to meet the energy requirements of the two countries, including India. Hosseinian is expected to discuss the new developments with the Indian government.

Waqar said there could also be a possibility of two parallel pipelines meeting India's requirements as well as Pakistan's. "Things are still to be sorted out at bilateral levels," he said.

He also said Pakistan may offer Iranian gas to China as part of Islamabad's efforts to provide an energy corridor to its ally.