Updated: February 9, 2010 19:15 IST

Iran hopes India will join gas pipeline project

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Though Petroleum Minister Murli Deora did not deliver on his promise for talks on the gas pipeline project, Iran is still hopeful that India will commit to the venture soon.
The Hindu
Though Petroleum Minister Murli Deora did not deliver on his promise for talks on the gas pipeline project, Iran is still hopeful that India will commit to the venture soon.

Despite India’s reluctance to restart talks on the long-delayed Iran-Pakistan-India gas pipeline project, Tehran said it hoped New Delhi will decide in favour of joining the USD 7.4 billion project.

Iran’s Ambassador to India, Seyed Mehdi Nabizadeh, said while Tehran had reached an agreement with Pakistan for laying of a gas line to that country, New Delhi was welcome to join the project.

“We have kept the doors open for India to joint the project,” he told a news conference here.

India, which has been boycotting talks on the issue of security of gas supplies through the pipeline for more than two years, had in December 2009 agreed to restart dialogue, but has so far not specified any dates.

“(Petroleum Minister) Murli Deora has promised that by next week, they (India) will specify dates for holding trilateral talks,” Iranian Deputy Oil Minister Seifollah Jashnsaz had said after meeting Deora here on December 2.

The Iranian Ambassador did not seem to mind the delay, saying no fixed timeframe was decided for holding the talks.

New Delhi last attended a trilateral ministerial meeting on the project in 2007, and has not even held any bilateral dialogue in the past 18 months. India wants Iran to guarantee safe delivery of the gas through Pakistan and is also upset at the frequent changes Tehran has made in the gas price.

Iran and Pakistan had last year signed a bilateral agreement to sell gas from the giant South Pars field in the Persian Gulf through a pipeline. If India joins the project, the pipeline would be extended to Rajasthan border.

Nabizadeh said though the pipeline has been on the table for 15 years now, “there is still prospect of implementing this project.”

He, however, said the doors for India to join the project will not be kept open indefinitely. He did not specify any deadline.

Officials said India was willing to join the pipeline if Iran guarantees safety of the pipeline in Pakistan.

India wants Iran to take up the responsibility of gas delivery on the Pakistan-India border rather than the proposed sale point at Iran-Pakistan border, he said, adding this way Iran would be responsible for passage of gas in Pakistan and will bear losses in case of disruptions.

Iran, which had originally priced its gas at USD 3.2 per mmBtu, had in 2007 revised the rates to USD 4.93 per mmBtu at USD 60 a barrel crude oil, which was accepted by India.

Iran has now changed the formulation that would mean India paying USD 8.3 per mmBtu at USD 60 a barrel oil price.

Added to this would be a minimum of USD 1.1-1.2 per mmBtu towards transportation cost and transit fee that India would have to pay for wheeling the gas through Pakistan, he said.

The official said India has rejected the changes as unilateral revisions was against the spirit of stable contract regime.

Issues like frequent revisions in prices and terms made by Iran have delayed finalisation of the agreement on the IPI pipeline, which should have become operational in 2010 if things would have gone as agreed in 2005.

Iran was not willing to commit to a supply-or-pay regime wherein it would have been held accountable for non-delivery of gas at the Indian border. It, however, wants New Delhi to commit to a strict take-or-pay clause wherein India would have to pay even if it does not take deliveries.

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