India seeks Pak word on pipeline

Grant MFN status and guarantee security of supplies, India tells Pakistan

India will consider a $4.16 billion gas pipeline from Iran through Pakistan only if Islamabad grants New Delhi the most favoured nation (MFN) status and guarantees the security of supplies.

"New Delhi will not consider the project in isolation and it will form a part of an overall trade and economic package that includes Pakistan granting MFN status on India," an official said.

The external affairs ministry has censored Petroleum Minister Mani Shankar Aiyar's attempts to take up the project without any pre-condition and wants Islamabad to guarantee security of physical infrastructure and uninterrupted supplies and give New Delhi transit rights. Around 760 km of the 2,775-km pipeline will pass through Pakistan.

Aiyar is scheduled to call on the visiting Pakistani Prime Minister Shaukat Aziz tomorrow evening and the Iran-India pipeline is likely to figure in the 45-minute meeting.

The official said the ministry had also poured water on Aiyar's plea for pushing for a diesel export pipeline from Jalandhar to Lahore as a guarantee of ensuring that Pakistan did not shut off taps of the gas line.

"A small pipeline carrying only 0.5 million tonnes per annum of diesel annually to Pakistan cannot stand as a guarantee for the multi-billion dollar gas purchases India will make from Iran," the ministry noted.

Pakistan can resort to importing diesel by oil tankers, like it is doing currently, in case India uses the diesel export line as a pressure tactic.

Moreover, Pakistan may not find importing diesel from India attractive as it gets multi-million dollar Islamic aid from Kuwait and other Persian Gulf countries when it imports oil products from them.

Iran has been pursuing the pipeline proposal, which will save India millions of dollars in energy cost, with New Delhi and Islamabad since 1996, but tensions between the two countries has blocked progress.

Pakistan is expected to get $600-800 million annually in transit fee alone from the proposed pipeline.

The official said Iran plans to sell 85 million standard cubic metres per day of natural gas from the pipeline, 57 mmscmd of which are destined for India while the remaining 28 mmscmd for consumption in Pakistan.

BHP Billiton of Australia has already studies the feasibility of the pipeline, which will connect Iran's gas fields at Assaluyah (South Pars) to India's main trunk line of Hazira-Bijapur-Jagdishpur.

Around $1.86 billion will be required to lay the 1,115-km line from Assaluyah field in Iran to the Pakistani border, while the 760-km in Pakistan will cost $1.20 billion. Another $1.10 billion would be needed for laying a 900-km pipeline from the Indo-Pak border to the HBJ line.