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Our Bureau

New Delhi , Sept. 15

INDIA and Pakistan may seek international certification on Iran's gas reserves once the structure of the trans-national pipeline is finalised. Iran is estimated to have the world's second largest gas reserves after Russia, and an international certification may be sought assessing long-term supply of assured gas, a Petroleum Ministry official told Business Line.

The Minister for Petroleum and Natural Gas, Mr Mani Shankar Aiyar, was expected to seek Cabinet approval on the proposed Iran-Pakistan-India pipeline in November, the official said. Representatives from the three countries were also expected to meet for the first time towards November-end to discuss the pricing of the gas, transit fee, quantity of gas, project specification, and structure, the Ministry official, who was part of the recently-held Pakistan-India Joint Working Group meeting on cooperation on the pipeline project, said.

As of now, three sets of bilateral negotiations are being conducted between India, Pakistan and Iran. In a joint statement at the end of a two-day meeting in Islamabad late last week, the three countries affirmed their commitment to abide by the December 31 deadline for signing the tripartite agreement on the pipeline project. It was also agreed that the Indian side would provide Pakistan drafts of the Tripartite Agreement, which would be discussed at the next meeting of the joint working group.

Cost estimates: About the estimated project cost, the official said Pakistan sees it at around $5 billion compared with $7 billion estimated by India. The project cost had come down due to softening of global steel prices, whereas India had taken into account peak steel prices while determining project cost. Steel would account for about 60 per cent of the project cost.

Pakistan has also agreed to share with India its research on different routes for the proposed pipeline. India has suggested Barmer or Jaisalmer in Rajasthan as the entry point for the pipeline into the country.

While India is expected to get 60-90 million standard cubic metres of gas a day from the proposed pipeline, Pakistan has said it would need 30-60 mscmd of gas from Iran.

The official said since stringent international norms would be followed for the security of the project, the talks between India and Pakistan focussed largely on technical, financial and legal issues.

Pre-feasibility study: India has appointed Ernst & Young as its financial consultant for the project. GAIL (India) Ltd, which has been asked to finalise the technical and legal advisor for the project, is expected to nominate the advisors by the first week of October since the company recently floated tenders for the purpose.

The technical consultant will carry out the pre-feasibility study for the onshore Iran-Pakistan-India pipeline project, to be used by GAIL and the Government as a basis for inter-Governmental framework agreement. The consultant will also suggest two alternative routes for the pipeline other than the indicated route and transportation tariff under various scenarios as asked by the financial consultant.

The legal consultant will provide assistance in formulating a comprehensive legal and transactional framework to facilitate negotiations for the construction and operation of the project. The selected consultant will also draft and negotiate various inter-State and State-level agreements, including inter-Governmental agreement between the three countries, to facilitate realisation of the project with emphasis on the need to protect investment and trade.

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