New Delhi
12 October 2009
The fate of Iran - Pakistan - India (IPI) gas pipeline project is likely to be known
when the Indo - Iranian joint working group on oil and gas meets, possibly in a few
months. Ahead of that, Union Minister of Petroleum and Natural Gas Murli Deora will
meet with Iran's First Vice President Mohammad Reza Rahimi in Beijing this week, on
the sidelines of a Shanghai Cooperation Organisation (SCO) meeting. India along with
Pakistan, Iran and Mongolia are observers of the SCO.
Mr Deora's talks with the Iranian delegation should be seen as an effort to keep the
bilateral ties on an even keel, particularly since Iran has indicated that it cannot wait
forever for India to make up her mind on whether to participate in the IPI project or not.
Until recently, New Delhi did not want to be seen doing business with Tehran for fear of
jeopardising the India - US nuclear deal. Also, New Delhi took the position that unless
the delivered cost of the gas in India is competitive with other alternative sources, it will
not be worthwhile to participate in the project merely for political reasons. But the
consequences of dragging its feet are beginning to tell on the Indian companies'
attempts to develop Iranian oil and gas assets. Already, China National Petroleum
Corporation has bested the ONGC -- Hinduja consortium in clinching a deal for the South
Azadegan oilfield, and Angola has edged India out for a stake in the South Pars-12
oilfield.
The talks between Iran and India on the IPI project are stuck on the issue of price of gas
and some technical issues but New Delhi has not vigorously pursued the negotiations
partly in deference to Washington's sensitivities. Ironically, New Delhi is vacillating at a
time when Washington is exploring ways to reengage with Tehran. Some in Washington
are beginning to see Iran as a part of the solution in Afghanistan. India, on the other
hand, is battling to salvage her relationship with Iran. "We sacrificed our friendly ties
with Iran on the altar of [the India - United States] nuclear deal," rued a former Indian
diplomat.
For his part though, Minister of External Affairs SM Krishna has said that India remains
interested in the gas pipeline project. "In view of our rapidly growing economy and
expanding energy needs, India is interested in cooperation with Iran in the oil and gas
sector. Issues of the pricing formula, transit fee, security and financial guarantees have
been areas of discussion with respect to the pipeline. Bilateral cooperation in this sector
and on the pipeline will be further discussed in the Joint Working Group on Oil and Gas
likely to be convened this year," Mr Krishna told this newspaper in a recent interview.
According to Iran's Ambassador to India Seyed Mehdi Nabizadeh, the Indo-Iranian ties
should also be seen in the regional and global perspective. He thought there is scope of
cooperation between Iran and India in Afghanistan. "As neighbours of Afghanistan, Iran
and India share responsibility for stability and development in Afghanistan. Iran and
India are involved in undertaking infrastructure development projects in Afghanistan," he
said.
Mr Nabizadeh added: "The situation in the areas bordering Pakistan and Afghanistan,
where terrorists are active, is a worrying situation for Iran and other countries in the
region." He also said that there is scope for trilateral cooperation between Iran, Russia
and India in energy security, economic issues, and other projects such as the North --
South Corridor, which can be helpful to countries in West Asia and beyond in Europe.
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