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Iran offers to bear 60 pc cost of gas pipeline project

Our Bureau

New Delhi , Nov. 25

IN an attempt to give impetus to the beleaguered $3-billion Indo-Iran gas pipeline project, Iran today offered to foot 60 per cent of the project cost.

The proposed pipeline orginates from Iran's southern fields, travels through Pakistan and terminates in India.

"Gas transported through an on-land pipeline passing through Pakistan will be much cheaper than alternative source such as importing gas by ships in the form of Liquefied Natural Gas (LNG)," the Iranian Deputy Minister of Foreign Affairs, Mr M. H. Adeli, said at the World Economic Forum (WEF) conference here today.

Mr Adeli said that if the pipeline skirts Pakistan and instead travel through deep sea to India, several technical issues arise. India prefers that the pipeline bypasses Pakistan fearing a possible disruption in supplies.

"Deep sea pipelines pose technical and financial difficulties as they have to be laid at water depth of 3500 metres. A shallow water line too is difficult as a rough sea bed is not suitable for laying a gas pipeline," Mr Adeli said.

Unlike the previous proposal where Pakistan was just a transit country, Iran's latest proposal promises that Islamabad will not disrupt supplies to India as it too would be taking gas for its domestic requirements.

Both Iran and Pakistan are keen on setting up the 2,670-km long onland pipeline. This provides a market for Iran to sell its vast gas reserves. Pakistan would earn around $580 million as transit fee from the project.

"The pipeline can save India up to $300 million every year in energy costs," Mr Adeli said.

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