06-11-05 A senior Oil Ministry official warned of the possibility of the India-proposed consortium for constructing the controversial Iran-Pakistan-India gas pipeline being subject to US sanctions.
Hadi Nejad-Hosseinian, deputy oil minister for international affairs said, however, that if the consortium uses Iranian investment in its operations within Iran, the threat will be overcome.

"If India and Pakistan create a consortium under which operations within Iran are entrusted to the Iranian side, it will not be subject to US sanctions," he said, adding that if the consortium decides to invest in Iran, the threatened sanction will remain valid.
He said that gas price must be set in a way that Iran's financial interests are safeguarded, stressing that the future price fluctuations will have to be taken into account in devising a price.

The official said the Indian side has proposed the establishment of two consortia, one to implement the project and the other to exploit it.
"Based on the Indian proposal, Iran will play no role in marketing and sales of gas," he said without elaborating on whether Tehran has accepted the proposal or not. Nejad-Hosseinian said that Iran has not offered to construct a gas-fuelled refinery and a petrochemical complex in India in return for the purchase of gas.

He said reports indicating Iran's will to enter into other energy projects with India as a gas deal incentive are untrue. Indian sources had reported earlier that Iran is planning to construct a gas-fuelled refinery and a petrochemical complex in India using gas supplied through the Iran-Pakistan-India pipeline.
New Delhi also said it has negated Tehran's proposal of two separate gas pipelines, one to India and another to Pakistan, saying it did not address the country's security concern. Iran's suggestion for two separate pipelines is reportedly a result of the cumulative gas demand of all three nations exceeding the proposed pipeline's conduit capacity.