India, Pakistan agree to begin work on gas pipeline

New Delhi
17 December 2005

India and Pakistan on Saturday agreed to begin
construction of the over 7-billion dollar Iran-Pakistan-India gas pipeline by
mid-2007 so that the first gas flows by the end of 2010.

"The project structure (how the project will be built and operated) and the
framework agreement (the agreement between India, Pakistan and Iran on
the pipeline) will be finalised by April 2006," Petroleum Secretary SC
Tripathi told reporters at the end of two-day meeting of the Indo-Pak joint
working group on the project here.

Initially, India will draw 60 million standard cubic metres per day from the
over 2,100-km pipeline project and ramp it up in the next 2-3 years while
Pakistan would start with 30 mmscmd and double its offtake by 2013,
Pakistan's Petroleum Secretary Ahmad Waqar said.

The three countries, which till now have been meeting only bilaterally --
India has held talks with Pakistan and Iran separately and Pakistan with
Iran separately -- will for the first time hold a trilateral meeting in early
February
2006 in Tehran.

The meeting would address the issues relating to the project, including an
integrated feasibility study, project structure and tripartite framework
agreement.

Mr Tripathi said India needed the project for its energy security and was
moving on it as per Prime Minister Manmohan Singh's advice. While Iran
has identified certain blocks of gas in the gigantic South Pars field in the
Persian Gulf, which would be dedicated to the proposed pipeline project,
Tehran had also agreed to international certification of reserves, he said.

The Pakistani official said his country would appoint consultants in two
weeks
time to advise it on financial, technical, legal and commercial issues
pertaining to the project.

India has already appointed financial and technical consultant and will in
the next few days appoint a legal consultant.

"We don't see any stumbling block. We are moving achead and god
willing, the project will see the light of the day," the Pakistani official
added.

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