Kuala Lumpur/New Delhi: India, Pakistan and Iran will soon sign a deal on building a $7-billion pipeline to supply Iranian gas to energy-hungry south Asian nations.
While Iran on 11 June said a deal will be signed by end-June, India expects to sign a tripartite agreement by end-July.
Iran has the world’s second-largest gas reserves after Russia. However, sanctions, politics and construction delays have slowed its gas development. Analysts say Tehran is unlikely to become a major exporter for a decade.
India, Iran and Pakistan agreed over the price formula for the pipeline, known as the “peace pipeline”, in January, Hojjatollah Ghanimifard, international affairs director of the National Iranian Oil Company (NIOC) said.
“We hope the remaining part, which is just some clauses of the sale and purchase agreement of the gas, will be concluded hopefully by the end of June,” he told reporters at the Asia Oil and Gas Conference, an energy meeting in the Malaysian capital.
The proposed pipeline will initially carry 60 million cubic metres (2.2 billion cu ft) of gas to be exported daily to Pakistan and India, half for each country, Ghanimifard said.
“The delivery point would be at the Iran-Pakistan border, so the Indians have to finalize the contract for the transportation costs and the transit fee with Pakistan,” he added.
“As soon as they finish this contract -- they have discussed it for some months now -- we can have everything done.”
Oil Secretary of India, M. S. Srinivasn, said that any deal on the pipeline can only happen by end-July after an official level meeting with Pakistan, followed by a ministerial meeting to decide on transportation tariff and transit fee.
“We want to meet the Pakistani officials before a trilateral meeting. India and Pakistan will discuss transportation tariffs and transit fee at the bilateral meeting before the final agreement can be signed, ” he told reporters.
Under the plan, the pipeline capacity would be increased to 150 million cubic metres.Iranian Oil Minister Kazem Vaziri-Hamaneh earlier told the Iran section of the pipeline is nearly half complete.“I think negotiations for the final stage is under way. Hopefully there will be a result soon,” he said.
“As far as the project is concerned, for the Iranian section, work has already started. Maybe close to 50% is complete and it is continuing.”
The pipeline, which Ghanimifard said had been under discussion for nearly 15 years, has made slow progress because of political tension between India and Pakistan and differences between New Delhi and Tehran over Iran’s nuclear programme.