The Hindu : New Delhi News : Gas pipeline project: India and Pakistan move ahead

Online edition of India's National Newspaper
Friday, Jul 15, 2005

New Delhi

New Delhi

Gas pipeline project: India and Pakistan move ahead

Special Correspondent

To appoint financial consultants so as to enter into a framework agreement by Dec. India agrees to participate in other transnational gas pipeline projects

NEW DELHI: India and Pakistan have moved a step towards making the long-awaited Iran-Pakistan-India gas pipeline project a reality. The two countries decided to appoint financial consultants with the aim of entering into a bilateral framework agreement by December this year.

A two-day meeting of a joint working group concluded on Wednesday with both sides looking forward to starting work on the project in 2006, with the gas supplies expected to begin from 2010.

According to Pakistan's Petroleum Secretary Ahmad Waqar, India has also agreed to participate in other transnational gas pipeline projects in the region such as the Turkmenistan-Afghanistan-Pakistan (TAP) and Gulf-South Asia projects. India has been invited to attend the next meeting of TAP's steering committee.

Releasing the joint statement after the talks, he said the project was essential for "sustainable and affordable energy" to meet the needs of the two countries' high economic growth rates. While it was considered too early for discussions on the price of gas, the two sides agreed on the crucial importance of appointing financial advisory consortia to advise on project structure and related technical, financial, commercial and legal matters.

Framework agreement

It was also agreed that once basic issues pertaining to the project had been satisfactorily resolved between the three countries concerned — Iran, Pakistan and India — they would enter into a "Framework Agreement." In this regard, it was agreed that the Indian side would submit a draft text to the Pakistan side before the next meeting of the JWG, scheduled for August in Islamabad.

Both countries agreed there were common interests in regard to technical aspects such as size and specifications of the pipeline, quality of gas, quantum of gas required by both sides and the build period. The joint statement also said that technical experts of both countries would meet soon to harmonise the position to achieve a project of international standards.

The consultants, who are expected to be appointed by mid-September, will submit their reports by November-end. The bilateral talks on these issues are expected to pave the way for a trilateral agreement involving Iran as well, according to Petroleum Secretary S.C. Tripathi, who led the Indian delegation at the JWG.

Safety standards

Mr. Waqar said the aim was to complete the project by 2010 as Pakistan was projected to become a gas deficit country by then. Pakistan would initially be importing 10 million standard cubic meters per day raising it to 60 mmscmd over the next five years. India was considering importing 60 mmscmd initially and increasing the quantity to 90 mmscmd over a three-year span. However, the framework agreement would address all concerns of safety of pipeline and safe delivery of gas.

The joint statement said the two sides would initiate the process of joining the Energy Charter, initially with observer status. In the various inter-governmental agreements entered into by them, the provisions of the charter, which governs operations of such pipelines globally, would be referred to.

On the price of gas, Mr. Waqar said it would depend on the well-head cost of the gas, transportation cost and the transit fee, which would be based on international standards. He stressed that the project was in the interest of the "progress and prosperity of our people." The project was feasible even without India joining it, though the economics would improve with the larger country joining it.

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