India and Pakistan close to IPI gas pipeline project deal

India and Pakistan in a bilateral meeting came close to finalise the Iran-Pakistan-India (IPI) gas pipeline project by sorting out all debatable topics on Friday, official sources informed to media.

This fruitful result came after successfully trilateral meeting held on April 23 and 24 on another ambitious Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipe line project that concludes with signing of the agreement on TAPI project.

India, Pakistan and Afghanistan on April 24 have inked a framework agreement to lay the pipeline from Turkmenistan's Dauletabad gas field to Fazilka, the border of India-Pakistan. The pipeline to be laid by 2015 will supply 3.2 billion cubic feet of gas per day.

Whereas on Friday, after concluding the talks over IPI project, Indian Petroleum Minister Murli Deora told the reporters in Islamabad that all the controversial topics had been sorted out and it would take more than few days or few weeks to conclude the whole process.

Responding to the question of transit fee and transpiration tariff that were the major issue of this talk Indian Minister Deora said, “these were minor issues, we have sorted out these tariff and soon it will be declared”.

“Beside tariff issue, we have talked to my counterpart Khwaja Asif over the ‘pattern’ of infrastructure and its security,” said the Minister.

Security was also one of the major concerns as IPI pipeline will have to pass through Pakistan’s insurgency-hit southern province of Balochistan and Sindh. “The matter has been sorted out”, said Deora. Pakistan Minister Asif has assured that insurgency was almost under-control and ‘There will be no threat to this pipeline," he assured. Extra precautionary measures will be taken to ensure its security’ as Asif told to Deora.

On the issue of constructing of 2,775 km long pipeline that will run from South Pars gas field of Iran to India-Pakistan border initially carrying around 60 million standard cubic meters per day of gas, Minister said, “We have reached agreement on the principles on which, we hope, the project can go ahead.”

Both sides have agreed on ‘template’ for the transportation cost based on the actual cost of construction and maintenance of the pipeline, which have not been decided due to spiralling prices of steel.

“Instead of fixing the cost now and working on the escalations later, it was decided to agree on a formula, and the numbers would be filled in when construction began”, said official.

India has denied the rumours of ‘China’ factor as China has earlier expressed its desire to join the Iran-Pakistan pipeline in the place of India and after its delivering expression, India make haste to convene the meeting soon to finalise the matter.

As per sources, in the IPI gas pipeline project, the transit fee and transportation tariff was major factors as Pakistan was earlier asking 60 US cents for one cubic unit of gas while India was offering US 15-cent for the same.

But, now both the nation have been agreed on a range of prices, as per Khawaja Asif informed the reporters. However, he did not disclose the price-rate.

The construction work on very fruitful IPI pipeline project will begin from 2009 and scheduled to be completed by December 2012. It will carry 2.46-billion cubic feet of gas from Iran that will be equally dispensed to India and Pakistan. The estimated cost of project is USD 7.3-billion.