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IPI pipeline faces uncertain future

NEW DELHI: With terror becoming the focus of the relations between India and Pakistan, uncertainty has gripped the ambitious $7.5 billion Iran-Pakistan-India (IPI) pipeline, often touted as peace pipeline.

Since India is reluctant to be a part of any further negotiations on the issue, Pakistan is learnt to have offered to buy the Indian share of the gas from Iran.

Highly placed sources in the Petroleum Ministry said that under the current scenario in the aftermath of the Mumbai terror attacks, there would be little or no progress on the talks about the future of the pipeline.

India has not attended tri-lateral talks with Iran and Pakistan in the last one year. Although External Affairs Minister Pranab Mukherjee visited Iran in November and both sides reiterated their commitment to fulfil the peace pipeline dream project, things have remained “frozen” since then.

Sources said India was in no mood to talk to Pakistan in the present situation. This had stalled the progress on one of the most contentious issues — transit and transportation charges.

Pakistan’s Petroleum Secretary Farrakh Qayyum had written to the Petroleum and Natural Gas Ministry on October 18 inviting India for bilateral parleys in the first or second week of November. But that meeting has not happened.

Sources said New Delhi and Islamabad had almost reached a broad understanding on the transportation tariff payable to Pakistan for wheeling natural gas through the 1,035-km pipeline segment in that country.

But the two nations have not yet arrived at an agreement on a transit fee payable to Pakistan for allowing usage of its territory for passage of the pipeline to India. Islamabad is seeking $0.493 per mBtu, while New Delhi has offered $0.20 dollars per mBtu.

The three nations have reached an agreement on the price of gas. But the differences between New Delhi and Islamabad have been holding up the agreement that was to be signed by July-August this year.

The pipeline, which will span 2,300 km, will initially carry around 60 million cubic metres of gas a day, split between India and Pakistan equally. In Pakistan territory, an 800-km pipeline will be carrying gas for both Pakistan and India.

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