Iran urges India, Pakistan to go for gas pipeline

ISLAMABAD, Apr 28 (Reuters) A top Iranian oil official on Friday urged Pakistan and India to press ahead with a billion gas pipeline project or face the prospect of buying one million barrels a day of imported oil.

Going by current crude prices of just under a barrel, the two neighbours would have to fork out an extra .5 billion a year on oil imports, though the United States is hurriedly promoting other alternatives for energy-deficient South Asia.

''We think that is a very important project and if India and Pakistan don't implement this project, they will need to buy an extra one million barrels of crude oil daily,'' Deputy Oil Minister Mohammad Hadi Nejad-Hosseinian told reporters on his arrival in Islamabad for talks with Pakistan.

''This is a lot of crude oil especially (at) this time.

Prices of crude oil (are) so high and, in future, nobody can stop rising prices.'' The United States is trying to discourage both Pakistan and India from doing business with Iran while it remains under suspicion of trying to develop nuclear weapons.

Instead, Washington wants them to put faith in another proposed gas pipeline, running from Turkmenistan, through Afghanistan.

U.S. Assistant Secretary of State Richard Boucher has also presented an ambitious plan to Congress for a power grid that will link energy-rich countries in Central Asia with India and Pakistan.

The United States, to Pakistan's chagrin, has also offered to provide technical know-how for India's civil nuclear programme as part of a strategy to forge strong linkages with the fast-rising Indian economy.

India, which like Pakistan has had a history of friendly relations with Iran, is clearly keeping its options open on the pipeline issue.

After meeting with his Pakistani and Iranian counterparts in Qatar last weekend, Indian Oil Minister Murli Deora said he would like to see the deal signed in June.

Hosseinian said he hoped his discussions with Pakistani officials over the weekend would settle outstanding issues before a ministerial meeting in Tehran in June.

Before that, in the third week of May, Pakistan will hold a tri-lateral meeting, Amhed Waqar, Pakistan's secretary of oil ministry said.

Under the deal envisaged by Iran it would export 150 million cubic metres per day of gas for 25 years.

REUTERS CH PC1012