The Hindu : National : Aiyar hopes to revive gas pipeline project

Online edition of India's National Newspaper
Saturday, Nov 20, 2004

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National

Aiyar hopes to revive gas pipeline project

By Sushma Ramachandran

NEW DELHI, NOV. 19. The Petroleum Minister, Mani Shankar Aiyar, is likely to discuss the long-pending India-Iran gas pipeline project with the Pakistan Prime Minister, Shaukat Aziz, at a meeting on November 23. Addressing the Economic Editors Conference, the Minister said: "The project must be placed in the larger context of economic and trade relations between the two countries."

Mr. Aiyar is yet to receive a response from the Pakistan Oil Minister to his letter about using Pakistan as a transit corridor for bringing gas from Iran.

As for the talks with Mr. Aziz, the Minister stressed that there was no set agenda for the meeting. Sources said the Government welcomed the interest shown by Pakistan in the India-Iran pipeline, especially since the proposal was being considered on a "stand alone" basis instead of the past tendency to link all issues to that of Kashmir. Even so, the sources said the Foreign Office and the security establishment were not showing the same enthusiasm for the project as the Petroleum Ministry in view of the security issues involved in using Pakistan as a transit corridor.

Oil industry representatives, however, say the fact that Pakistan will be paid $600 million annually as a transit fee should be sufficient inducement to ensure that gas supplies move in an uninterrupted manner towards consumer industries in India.

The India-Iran gas pipeline project has been hanging fire for about eight years now but it has been given an impetus since the Prime Minister, Manmohan Singh, and the Pakistan President, Pervez Musharraf, met in New York in September and agreed to examine the project as it held the prospect of improving the welfare and prosperity of both countries.

Since the Pakistan Oil Minister is likely to form part of Mr. Aziz's delegation, indications are that Mr. Aiyar may also discuss exporting diesel to Pakistan, which has been discussed before to no avail.

The Indian Oil Corporation has already offered to supply diesel by rail to the Punjab province in that country. Pakistan, however, is already being supplied diesel at a considerable discount by Kuwait. The issue of pricing might thus have to be discussed before a deal can be struck. In addition, Pakistan will have to remove the ban on the import of fuel from India before any movement can actually take place on this proposal.

Mr. Aiyar highlighted the need to take care of national and energy security as gas would gradually replace oil for many uses in the 21st century. He has also been in touch with Bangladesh for using that country as a transit corridor for gas from Myanmar.

Both these pipeline projects, he noted, would enhance the country's energy security. Mr. Aiyar said he was trying to synergise oil diplomacy with commercial efforts to get access to oil and gas abroad. The dialogue with Pakistan and Bangladesh was aimed at this objective.

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