Iran, Pakistan Stress Implementation of IPI Pipeline Project

A02982921.jpgTEHRAN (FNA)- Iran and Pakistan said they are willing to undertake bilaterally a stalled multi-billion-dollar gas pipeline even if India does not join the project.

The pipeline, to carry gas from Iran to Pakistan and India, was first mooted in 1994 but has been delayed by repeated disputes over prices and transit fees.

The Foreign ministers of Iran and Pakistan met in Islamabad and announced that the 7.5-billion-dollar pipeline could start without India’s involvement.

“Iran is willing to undertake the project bilaterally”, Pakistan Foreign Minister Shah Mehmood Qureshi told reporters after talks with his Iranian counterpart Manouchehr Mottaki.

Mottaki endorsed the plan, saying that “India may join the project whenever it is ready for this”.

Talks on the project to supply gas to India and to Pakistan through the 2,600-kilometer pipeline have been hobbled by tensions between the two rival nuclear powers.

India, which imports more than 70 percent of its energy needs, has been seeking new supplies of oil and gas while increasing domestic production to sustain its booming economy.

Delhi has also been under pressure from the United States not to do business with Iran in a bid to force Iran to give up its civilian nuclear program.

Qureshi previously guaranteed Pakistan would “provide fool-proof security” for the pipeline, which is expected to pass through Pakistan’s volatile Baluchistan region.

Iran and Pakistan initiated a Gas Sales Purchase Agreement earlier this year. India and Pakistan have also resolved all bilateral issues including transit fee which saw New Delhi boycotting IPI pipeline talks for about a year.

India has more or less agreed to give Pakistan a transit fee of $200 million per year, which is equivalent to $0.60 per million British thermal unit for allowing passage of the pipeline through that country.

India and Pakistan finally agreed in February 2007 to pay Iran $4.93 per million British thermal units ($4.67/GJ) but some details relating to price adjustment remained open to further negotiation. There was a breakthrough in the talks in April 2008 when Iranian President Mahmoud Ahmadinejad visited Pakistan and India.

According to the project proposal, the pipeline will begin from Iran’s Assalouyeh Energy Zone in the south and stretch over 1,100 km through Iran. In Pakistan, it will pass through Baluchistan and Sindh but officials now say the route may be changed if China agrees to the project.

The gas will be supplied from the South Pars field. The initial capacity of the pipeline will be 22 billion cubic meter of natural gas per annum, which is expected to be later raised to 55 billion cubic meter. It is expected to cost $7.4 billion.

According to Indian ministry sources, the IPI gas pipeline is quite crucial for New Delhi as after signing of the agreement, 60 million standard cubic meters per day (mmscmd) of gas is expected to be supplied in phase-I, which will be shared equally between India and Pakistan.

In phase-II, 90 mmscmd of gas will be supplied to India and Pakistan. So far six meetings of the trilateral joint working group (JWG) of the participating countries have been held with the last meeting being held in New Delhi on June 28-29, 2007.

India, Asia’s third-largest economy, can produce only half the gas it needs to generate electricity, causing blackouts and curbing economic growth. Demand may more than double to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7 to 8 percent a year, according to the Indian oil ministry.

Iran plans to start exporting gas to Pakistan in 2011. Iran has completed half the pipeline, which can carry 110 million cubic meters of gas a day, National Iranian Gas Company (NIOC) said in April. India uses about 108 million cubic meters of gas a day, according to a BP Plc report.

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