India hopes talks on gas pipeline would have positive results

Teheran, Feb 6 (UNI) India is hopeful of a positive outcome after crucial talks on the tri-nation 7 billion dollar gas pipeline project here tomorrow.

The will help bridge the growing energy needs and give a boost to the ultra mega projects currently underway in India.

India is also eyeing the huge LNG supply from Iran.

External Affairs Minister Pranab Mukherjee who is here, will meet top state members including the President and Foreign Minister of Iran tomorrow.

Sources told UNI that India thinks the visit is a ''historical opportunity'' and is hopeful of progress in the tri-nation gas pipeline project that is yet to take off after a standoff on the issue of pricing of gas.

The gas pipeline project will help address the energy deficit in India, they said.

''We are looking at mega projects and it will be better to settle the fuel tie-ups in advance.'' After the last meeting on 25th January, delegates of all three countries had reported back to their countries for further instructions.

India is also helping Iran to set up a huge container terminal project and 595 Km railway project that would help access to the central asian countries.

Decisions on the railway project will be reviewed here this week.

Other issues that will crop up are double taxation, trade and cultural ties during the meetings tomorrow.

Tata and Essar are also close to begin work on steel plants at an investment of 1.4 billion dollars and 3 billion dollars respectively.

A consensus has been reportedly reached between India, Pakistan and Iran over the gas price for the proposed Iran-Pakistan-India gas pipeline project.

Iranian state radio has quoted a senior Iranian oil ministry official as saying that Iran, India and Pakistan have agreed over a price formula.

''We have finally reached an agreement over the price formula,'' The News quoted Hojatollah Ghanimifard, Iranian Deputy Oil Minister as saying.

''The three delegations will now take the results to their governments for further discussions,'' Mr Ghanimifard said, adding that the three governments had one month of time to announce their final decision on the agreement.

Though no details of the formula or the agreed price range was shared by him, he expressed hope that the remaining measures regarding the natural gas pipeline would be taken by the end of June.

UK-based consultant Gaffney Cline and Associates was appointed by the three countries in September after they failed to agree on a rate acceptable to all. But India and Pakistan had rejected the price suggested by consultant in November.

In August, Iran had offered a price linked to Brent crude oil that equated to about eight dollars per million British thermal units (mmBtu), while New Delhi wants to pay about 4.25 dollars per mmBtu.

Last week, Pakistan President Pervez Musharraf had called on his Iranian counterpart Mehmoud Ahmadinejad and discussed the progress made in the Iran-Pakistan-India gas pipeline project.

It was then agreed that Pakistan's Petroleum Secretary Waqar Ahmad would visit Tehran in February to hold talks on the issue.

The project is likely to start by mid-2007 and will be completed by early 2010.

Under the proposed IPI gas pipeline, Pakistan will receive a maximum of 2.5 billion cubic feet (BCFD) of gas per day from Iran while India will get 3.1 BCFD of gas, about 5.6 BCFD of gas will be transported to Pakistan and India per day.

The work dubbed as the ''Peace pipeline'' is a 2,775 km gas pipeline project to deliver gas from Iran to Pakistan and India.

It is expected to benefit Pakistan besides Iran and India. India is predicted to require 400 million cubic metres of gas per day by 2025, up from 90 million cubic metres per day in 2005.

The project was conceptualised in 1989 by Dr R K Pachauri in partnership with Dr Ali Shams Ardekani, former Deputy Foreign Minister of Iran.

Dr Pachauri proposed the plan to both Indian and Iranian governments in 1990. The Government of Iran responded positively to the proposal. At the annual conference of the International Association of Energy Economics, 1990, Dr Ardekani backed Dr Pachauri's proposal.

The pipeline is proposed to start from Assaluyah, South Pars stretching over 1100 kilometres in Iran itself. In Pakistan, it will pass through Baluchistan and Sind. The total cost of the project was estimated to be over 7 billion dollar in 2006.

The deal witnessed a setback on July 16, 2006 when Iran demanded a price of 7.2 dollars per mmBtu of gas against India's offer of 4.2 dollars per mmBtu.

The Indian spokesperson had reasoned that Tehran's price was more than 50 per cent the prevailing market determined gas price in India.

UNI