The Hindu Business Line : Iran-Pak-India pipeline — India for linking gas prices to crude, alternative fuels

WITH the Iran-Pakistan-India (IPI) gas pipeline project moving towards the trilateral level, the issue of pricing, project structure and routing of the pipeline would become the core areas of deliberations. India has indicated that the gas prices should be linked to the price of crude oil and alternative fuels such as coal and uranium (in the long run), an official said. The pricing formula should be rigid to the extent that all the parties concerned are satisfied with it, he added.

"It should be fair to Iran and affordable to India and Pakistan," the official stated. Besides, both India and Pakistan felt there should be a ceiling to the price. However, given the volatility of oil and gas prices, the formula would have conditions to review and compare with international and regional prices, the official added.

Meanwhile, Iran has indicated that under the formula being mooted by it there would be no ceiling on the price of gas to be supplied to India and Pakistan. "We will not have any ceiling on the price and will consider regional and international prices prevailing at any point in time. Based on that we will prepare price structure," the Iranian Deputy Petroleum Minister for International Affairs, Mr Nejad Hosseinian, had said.

On the project structure, the official said it would be linked with one major issue, that is, comfort to India. There are two options — either to become a co-investor or buy the product at the Indian border. Indications are that a steering committee comprising representatives of the three countries would oversee the IPI project. The committee could comprise ministers and officials of the three nations to monitor the implementation of the project.

To deliberate on the pipeline specifications, diameters, thickness, inner coating, security measures and routing, particularly the route where it is entering India from Pakistan, a joint technical workshop would be held in mid-January in India, he said. The issues would be looked into keeping in mind the commercial aspects of the project, the official stressed.

India is looking at the pipeline project to secure 60-90 million standard cubic metres per day (MSCMD), while Pakistan is seeking 30-50 MSCMD of gas supplies to bridge the expected shortfall in domestic production. The gas sale and purchase agreement is to be worked out for 25-30 years.

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