China keen on joining Iran-Pakistan-India pipeline project

June 26th, 2008 - 12:32 pm ICT by IANS  

A file-photo of Pervez Musharraf
By Muhammad Najeeb
Islamabad, June 26 (IANS) China is keen on joining the $7.5 billion Iran-Pakistan-India (IPI) gas pipeline project and will send a delegation here for negotiations on the deal, a Pakistan petroleum ministry official said Thursday. “We had sent a formal proposal to China to join the project earlier this month and have received a positive response,” the official told IANS on condition of anonymity.

He said a Chinese delegation will soon visit Pakistan for initial talks and may also undertake a trip to Iran.

The IPI pipeline is a proposed 2,775-km-long pipeline to deliver natural gas from Iran to Pakistan and India. The official said China has asked for some more information about the project, which Pakistan would be furnishing “very soon”.

When asked if Iran was willing to supply gas to China, the official said: “We invited China after seeking Iran’s consent.”

The project was mooted in 1990 with expectations that it will benefit both India and Pakistan, who do not have sufficient natural gas to meet their rapidly increasing domestic demand for energy. However, it was delayed due to several reasons, including New Delhi’s security concerns.

Pakistan, which is keen on buying gas because of its own diminishing gas reserves, is looking at China to make the project a reality if India decides to pull out.

During his last visit to China, President Pervez Musharraf had tried to convince his counterpart Hu Jintao to join the project.

The petroleum ministry official said Pakistan had also asked the Chinese government to conduct a detailed feasibility study of the gas pipeline. There has been no progress on the project since a dialogue was held between Pakistan and India in Islamabad in April.

“We are very keen to undertake the project with India but we are no more getting any positive signals from Delhi,” said the official.

The deal reached a setback on July 16, 2006 when Iran demanded a price of $7.20 per million British thermal unit ($6.80/GJ) of gas against India’s offer of $4.20 per million British thermal unit ($4.00/GJ). The Indian spokesperson stated that the price offered by Iran was more than 50 percent above the prevailing market price in India.

India and Pakistan finally agreed in February 2007 to pay Iran $4.93 per million British thermal units ($4.67/GJ) but some details relating to price adjustment remained open to further negotiation. There was a breakthrough in the talks in April 2008 when Iranian President Mahmoud Ahmadinejad visited Pakistan and India.

The Indian government has called for trilateral talks on the project next month but no date has been fixed.

According to the project proposal, the pipeline will begin from Asalouyeh and stretch over 1,100 km through Iran. In Pakistan, it will pass through Balochistan and Sindh but officials now say the route may be changed if China agrees to the project.

The gas will be supplied from the South Pars field. The initial capacity of the pipeline will be 22 billion cubic metre of natural gas per annum, which is expected to be later raised to 55 billion cubic metre. It is expected to cost $7.5 billion.

“If all goes well, the construction of the pipeline may begin by March 2009 and get completed by September 2012,” the official said.

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