Piping up

Pakistan, Iran say gas pipeline. India says all gas

Published: Saturday 31 January 2004

in the light of the recent thaw in Indo-Pak relations, both Pakistan and Iran are mounting pressure on India to agree upon the much talked about overland gas pipeline project. At the recently concluded South Asian Association of Regional Cooperation (saarc) summit in Islamabad, India's Prime Minister, Atal Bihari Vajpayee, was urged by his Pakistani counterpart, Mir Zafarullah Khan Jamali, to seriously consider participating in the proposed project. Pakistan would earn as much as us $700 million per year in transit fees for the pipeline.

Iran has the world's second largest gas reserves after Russia. The energy-starved Indian market is the only one at present to which it can supply gas in bulk through a pipeline, which is the cheapest method. The Iranian deputy minister of petroleum and gas, M R Nematzadeh, had reiterated in early December that the proposed pipeline would cut down the cost of gas in the Indian market and mitigate the shortages. India imports 50 per cent of its gas, and the energy consumption is increasing by about 5 per cent every year. But India has refused to even consider the proposal due to safety concerns for a pipeline going through Pakistan.

In late December 2003, M M Mokhtari, consul general of Iran in India, said at a meeting in Mumbai that the feasibility study report for the project is expected by March this year. Mokhtari said Iran would be financing 65 per cent of the estimated cost of us $2 billion. Highly placed officials in a public sector oil company informed Down To Earth that the Indian government has not even considered the pre-feasibility report. "Iran is preparing the feasibility report for only till Pakistan because it is dead keen to sell gas," said an official. Pakistani and Iranian officials met a few days prior to the saarc summit and decided to go ahead with the project irrespective of the Indian position. But the pipeline would not be viable if it doesn't come to India as the Pakistani gas market is very small.

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