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India seeks separate JV firms for gas pipeline

India has suggested separate JV firms for construction and operation of the over $7 billion Iran-Pakistan-India gas pipeline.

india Updated: Nov 02, 2005 19:39 IST

India has suggested separate joint venture companies for construction and operation of the over $7 billion Iran-Pakistan-India gas pipeline and may join both of them if its concerns of safe delivery of gas are addressed in the tripartite agreement.

At the Second Special Joint Working Group meeting in Tehran last month, New Delhi suggested separate joint ventures - made up possibly of national oil companies of the three countries and a specialist in the area - for project construction and operation, a senior government official said.

"We can participate in either construction of the pipeline or operating it or even both if such a participation guarantees safe delivery of gas," he said.

At the October 24 meeting, Tehran proposed participation of the joint venture companies in marketing of gas in India as well in Pakistan.

The official said considering the volume of gas India and Pakistan have desired to import from Iran, two parallel pipeline are being considered.

The maximum capacity that one pipeline can carry is 140 million standard cubic meters of gas per day. Pakistan wants 30 mmscmd in 2011 going up to 60 mmscmd in 2014, while India has indicated 60-90 mmscmd. Iran is contemplating 3-15 mmscmd of gas supply using the pipeline to its eastern parts.

New Delhi, however, has said that a second pipeline should be considered only after the first pipeline becomes operational.

The official said India has asked Iran to give price formulation for long term contract, say 25-30 years, which could be used for woking out the project viability for firming up the gas offtake.

Also, it would be necessary to have some estimate of the well head price of gas and the price formulation to work out the estimates of capital cost, operating cost and project viability.

Iran agreed to give indicative formulation by second or third week of November, the official said.

First Published: Nov 02, 2005 13:30 IST