Pakistan, India eye double gas pipeline projects for energy need

Pakistan, India eye double gas pipeline projects for energy need
Xinhia, April 25, 2008

ISLAMABAD, April 25 (Xinhua) -- Pakistan and India on Friday resolved their difference on the transit fee of the much-delayed Iran-Pakistan-India (IPI) gas pipeline project, also known as the peace pipeline.

The "complete consensus" was reached after Pakistan petroleum minister Khawaja Asif held length talks in Islamabad with his Indian counterpart Murli Deora, whose visit to Pakistan marks the first formal contact between India and Pakistan since the new Pakistani coalition government took office last month.

"We have agreed to consult with our respective government for an early conclusion of the agreement on the above issue," Deora told a press conference.

The project will not only meet gas requirements but also strengthen economic ties of the two countries, Asif said.

The IPI gas pipeline is a proposed 2,775-kilometer pipeline project to deliver natural gas from Iran to Pakistan and India, which is estimated to cost 7.5 billion U.S. dollars.

The long-delayed pipeline project, which has been under discussions in 1994, were deadlocked in mid-2007 when New Delhi refused to attend talks over differences on the transit fee and transportation tariff to be charged by Pakistan for Iranian gas sent to India.

While the transit fee is akin to a royalty to be paid to Pakistan for transporting the Iranian gas through its territory, the transportation tariff is linked to the cost of the pipeline.

In another aspect, Pakistan has finalized almost all legal, financial and technical aspects with Iran over the IPI project, Foreign Ministry spokesman Muhammad Sadiq said on Thursday.

The IPI project is expected to start construction next year. Iran plans to begin export of gas to Pakistan by the end of 2013.

Pakistan-India talks is following the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project from Wednesday to Thursday.

Oil ministers from the four nations signed a draft framework on Thursday, agreeing to start construction work of the TAPI gas pipeline project in 2010.

The project cost has risen to 7.6 billion U.S. dollars from originally estimated 3.3 billion dollars in 2004.

The talks on Turkmenistan-Afghanistan-Pakistan gas pipeline project have been underway since 2002. In 2006 India was invited as an observer to the project, funded by the Asian Development Bank.

This is the first time that India is participating in talks on the pipeline as a full-fledged member.

The 7.6-billion-U.S. dollar pipeline project starts from Turkmenistan's Dauletabad field through Herat and Kandahar in Afghanistan to Multan in Pakistan, and finally extends up to Pakistan-India border.

Analysts say Pakistan and India, despite political frictions, show willingness to carry out cooperation and are keen to clinch deals on the gas pipeline projects due to their energy shortage and burgeoning energy requirement.