Iran and Pakistan agree to gas accord without India

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Iran and Pakistan agree to gas accord without India Reuters Published: September 30, 2007, 00:33

Tehran: Pakistan has agreed to details of a deal for buying gas from Iran, officials from both sides said on Friday, adding that the proposed tri-nation pipeline would be viable even if India, the third party, walked out.

India stayed away from last week’s talks in Tehran on the proposed $7 billion pipeline, saying it wanted to agree transit costs through Pakistan on a bilateral basis first, an Iranian official said. But he said India had not said it was quitting.

“The economics of the project will improve with Indian participation but … the project is economically viable as a bilateral project also,” Mukhtar Ahmad, the energy adviser to Pakistan’s prime minister, told reporters in Tehran.

Hojjatollah Ghanimifard, international affairs director of the National Iranian Oil Company (NIOC), said the three sides had previously planned for gas sales and purchase agreements (GSPAs) to be negotiated separately by India and Pakistan.

“So far, the information formally we have from the authorities of India is that they are willing to join us. They have just their internal problems, including that they need to finalise the transit fee with our good Pakistani friends,” Ghanimifard said after talks late on Friday.

Iran’s oil minister said on Wednesday his country would still sign a deal with Pakistan if India decided not to join.

Mukhtar said Pakistan and India had agreed in principle how to tackle issues like transportation tariffs and transit fees.

“We don’t see transit through Pakistan as a problem. We’ve had bilateral discussions with India on this subject,” he said, although he said more talks were be needed.

Speaking of Pakistan’s talks with Iran, Mukhtar said: “We have agreed upon everything that we needed to agree on with regard to the gas sales and purchase agreement and the inter-governmental framework agreement.”

He said the details would be drawn up in final documents to be examined at bilateral talks in Islamabad on October 15-19.

Mukhtar did not give details for the price of the gas agreed but said it would be linked to the price of oil. He also they also agreed on a price review clause – an issue that had been pending – but he did not elaborate.

In July, Ghanimifard said India and Pakistan had accepted Iran’s demand for gas price reviews based on market changes.

He denied reports by some Indian newspapers that the pipeline talks had failed after Iran demanded a review every three years.

The pipeline would initially carry 60 million cubic metres of gas daily to Pakistan and India, half for each country.

The pipeline’s capacity would later rise to 150 million cubic metres. Pakistan says it could want 60 million cubic metres for itself in the future.

Iran says it has completed 18 per cent of the work for the pipeline to bring gas from its South Pars field up to Iran-Pakistan border. Pakistan has yet to begin work on a 1,000 km stretch of the pipeline to link Iran with India.

Strong demand: New Delhi plans about five petrochemical zones

India said on Friday it plans to set up 4 or 5 oil and petrochemical zones, each with an investment of up to $2.5 billion, to tap growing demand.

“There is a gradual shift in demand and production of petrochemicals from the west to the east and we want to make the best out of it by setting up the zones,” Chemicals and Fertiliser Minister Ram Vilas Paswan said. He said several state governments had expressed an interest in developing a so-called Petroleum, Chemicals and Petrochemical Investment Region (PCPIR).

“We cannot set up the PCPIR in all the states which have come forward. We have adopted a first-come-first-serve approach for allowing states to go ahead with it,” he said.

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