Date:14/07/2005 URL: http://www.thehindubusinessline.com/2005/07/14/stories/2005071402581100.htm

Back Gas pipeline project: India, Pak to appoint financial consultants

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The consultants would be expected to submit their report by November-end when Mr Mani Shankar Aiyar is likely to travel to Pakistan for signing an agreement on the project.

TAKING GAS PIPELINE PROJECT FORWARD: Mr S.C. Tripathi (right), Secretary, Ministry of Petroleum and Natural Gas, with his Pakistani counterpart, Mr Ahmad Waqar, during a press conference after signing a joint statement in the Capital on Wednesday. - Kamal Narang

New Delhi , July 13

TO take forward the process of smooth implementation of the $4.16-billion Iran-Pakistan-India (IPI) gas pipeline project, India and Pakistan have decided to independently appoint financial consultants by September.

Speaking to presspersons on the joint statement issued by both countries at the end of the two-day meeting of the joint working group (JWG), the Pakistani Secretary for Petroleum and Natural Resources, Mr Ahmed Waqar, said the appointment of financial advisory consortium was desirable at this juncture as international expertise was required for the project. The two sides would appoint their own respective financial advisory consortium to advise on the project structure and related technical, financial, commercial and legal matters.

From the Indian side, the Government is likely to mandate Indian Oil Corporation or GAIL (India) Ltd to appoint consultants, Petroleum Ministry sources told Business Line.

The consultants would be expected to submit their report by November-end when the Petroleum Minister, Mr Mani Shankar Aiyar, is likely to travel to Pakistan for signing an agreement on the project.

To carry the process forward, the two sides also agreed that the next meeting of JWG would take place in Islamabad towards the end of August. On the pricing of gas, Mr Waqar said that it would be premature to comment on it at this stage. However, he indicated that it would be based on international standards plus specifics of the project. "It was agreed that these matters would be pursued in greater detail at subsequent meetings of JWG," he added. The JWG has laid down a framework for further negotiations on the project. The two sides agreed that once the basic issues pertaining to the project were satisfactorily resolved between the three countries (Iran-Pakistan-India), they would enter into a `Framework Agreement', the Petroleum Secretary, Mr S.C. Tripathi, said.

The two sides had broad agreement on composition of gas, technical standards and techno-economic considerations that would make the project cost-effective for both the countries. It was also agreed that India would submit a draft text to the Pakistani side before the next meeting of the JWG, Mr Tripathi added.

Pakistan is looking at importing 10 million standard cubic metres per day of gas from Iran beginning 2010 and raise it to 60 million standard cubic metres per day (MSCMD) over the next five years. India on the other hand will begin with 60 MSCMD of gas and increase imports to 90 MSCMD in three years time. During the two-day meeting of the JWG, other pipeline proposals were also discussed, namely, the Turkemistan-Afghanistan-Pakistan pipeline and the Gulf-South Asia pipeline.