The Hindu Business Line : Pipeline project: 3 in race for financial consultant

KPMG, Ernst & Young and Standard Chartered are in the fray for being nominated as a financial consultant for the Iran-Pakistan-India pipeline project.

According to a senior Indian Oil Corporation (IOC) official, a decision on appointment of a financial consultant will be taken by the first week of September.

While, Indian Oil Corporation (IOC) was mandated to make an offer for appointment of financial consultant for the project, GAIL (India) Ltd has been asked to tender for appointing technical and legal consultants.

The financial consultant will play the main role in framing the roadmap for the project.

Five consultants were in fray for the multi-billion dollar project after about two-dozen bid documents were sold.

Of these five, three have been called to make presentation to senior Petroleum Ministry officials, he said.

The consultant would be required to suggest project models for the execution of the project.

Based on this model, the Petroleum Ministry would seek the mandatory approvals for participation in the project, which is estimated at $7 billion.

India had signed an agreement with Iran in May to purchase 7.5 million tonnes of LNG. India and Pakistan expect the pipeline to be laid by 2010.

The consultant is expected to submit its report within a stipulated time frame.

On the basis of the recommendations of the financial consultants, there would be a preliminary understanding on the preferred project structure by early November 2005. Once there was agreement on the project structure between the three countries, the trilateral framework agreement would be finalised by the end of this year, he said.

The three countries are planning to lay a 2,600-km pipeline to transport natural gas from Iran to India through Pakistan.

According to estimates, by 2025, India's demand for natural gas is seen at 400 million standard cubic metres per day while supply (from liquefied natural gas imports, gas pipelines and domestic resources) is pegged at 200 million standard cubic metres per day.

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