Our Bureau

New Delhi, June 3

THE Minister for Petroleum and Natural Gas, Mr Mani Shankar Aiyar, is leaving for Pakistan on Saturday on the first leg of his 10-day, three-nation tour. While in Pakistan, he will hold preliminary discussions on co-operation in the hydro-carbon sector, in Iran the programme is more substantive.

India is likely to sign an agreement with Iran for purchasing five million tonnes of gas from there, but efforts would also be made to see whether the amount of gas to be supplied could be increased to 7.5 million tonnes, the Minister said.

Besides, India will also see whether it can take a 20 per cent "participating interest" in an oil field there. "The principal operator is non-Iranian and non-Indian. The agreement between that country and Iran has not yet been concluded," the Minister said, when asked about the nationality of the company. Apart from Iran, the Minister is also to visit Azerbaijan and possibly Qatar.

Iran is pursuing the pipeline to India via Pakistan. On the other hand, the Asian Development Bank has been pursuing the Turkeministan-Afganistan-Pakistan pipeline and its possible extension to India.

"As of now, my mandate is to work on a bilateral agreement between India and Iran for purchase of gas at Indian borders. Another set of agreement would be between Iran and Pakistan on the passage of the gas through Pakistani territory," Mr Aiyar said.

During the visit, the next meeting of the Indo-Iranian Joint Working Group has also been scheduled. At that meeting, a proposal of Indian Oil Corporation (IOC) and an Iranian company for award of one block is likely to be taken up. IOC has also planned to invest in a gassification plant in Iran. Both, the Iranian national oil company and IOC will review the progress in this area.

The Indian company has also given an alternative financial package to the Iranian company for upgradation of two refineries. ONGC has also evinced interest to operate an oilfield in Iran, while GAIL is likely to join with Iranian companies.

In Pakistan, apart from meeting with his counterpart Mr Amanullah Khan Jadoon, Mr Aiyar would also meet the Commerce Minister, Mr Humayan Akhtar. At the meeting, the issue of removing diesel from the negative list of importable items from India is to be broached. ``My visit marks a historic change in India and Pakistan relationship. This is our first engagement in hydrocarbon sector,'' he said.

"There is no intention to carry discussions to a conclusion on this trip (to Pakistan). A Ministerial review will give the necessary signal to negotiators to carry matters forward," Mr Aiyar said.

The Minister also indicated that a tentative and preliminary opening could be made for India to invest in the Pakistan hydro-carbon sector, especially as the Government is looking to divest its stake in the State oil sector.

(This article was published in the Business Line print edition dated June 4, 2005)
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