India out of ‘peace pipeline’ as Iran, Pakistan seal gas deal

Tehran/New Delhi: Iran has formally signed a $7.6-billion cross-border pipeline deal to supply 750 million cubic feet of natural gas daily to Pakistan from mid-2014, ignoring India that was part of the original plan conceived in the 1990s.

The pipeline will connect Iran’s giant South Pars gas fields with Pakistan’s restive Balochistan province in the southwest and Sindh in the south. Once the gas starts flowing in, it will account for 20 percent of Pakistan’s needs, IRNA reported.

Iran has already laid around 900 km out of the 1,000 km of the pipeline envisaged on its territory. Now, Pakistan will have to construct about 700 km from the border to its gas transmission network at Nawabshah, near Karachi, at a cost of $1.65 billion, officials said.

The original plan, however, was different, with India keen to secure supplies from Iran, which boasts the second largest reserves of natural gas in the world after Russia.

In the mid-1990s, Tehran and New Delhi had inked preliminary pacts to transport gas to India through Pakistan. The proposal was then called “peace pipeline” to showcase to the world good neighborly relations between India and Pakistan.

But India remained concerned about three aspects, preventing meaningful pro-gress of the deal.

The first was the price of  gas; the second was Islamabad’s reluctance to guarantee the safety of the pipeline in its  territory and the high transit fee Pakistan demanded.

India, so far, has not said formally that it had withdrawn from the project. Petroleum Minister Murli Deora had, in April, even proposed a trilateral meeting in the Iranian capital to take the talks further.

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