Iran breathes new life into India-Pakistan pipeline project

Jan 15, 2003 01:00 AM

Ahead of president Mohammed Khatami's visit to New Delhi as the Republic Day chief guest, Iran has made an effort to breathe new life into the proposed gas pipeline project to India via Pakistan. It has offered gas at a throwaway price and a new multinational corporate blueprint for the proposed project.

Iranian officials had indicated to a visiting Indian delegation that they were willing to deliver the gas through the onland pipeline at $ 1.8 per mm Btu to the Indian border. This is nearly half of about $ 3 to $ 4 per mm Btu for imported LNG and naphtha. “The price can always be further lowered through negotiation if the deal is gone through,” an informed official told.
The project failed to take off due to the strained relations between India and Pakistan, though Italy's Snamprogetti and Australia's BHP are studying the feasibility of both the onland and a costlier undersea pipeline options. To take care of India's security concerns, the Iranian officials proposed a new global corporate ownership for the pipeline.

According to the blueprint, an international consortium of global bankers and energy majors led by BHP will own and operate the pipeline. The consortium will buy gas from state-owned National Iranian Oil Company and sell it to India. "The Iranians expect this will keep Pakistan's hands away from the tap," the official said.
But the external affairs ministry is not convinced. "There are scores of terrorist outfits with strong anti-India sentiment which is functioning unchecked in Pakistan. The cost of rebuilding the pipeline in the event of a sabotage by these groups is too high to allow the pipeline," an MEA official said. However, the Iranians never give up.

Source: The Times of India
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