After his 50-minute meeting with Prime Minister Manmohan Singh in New Delhi today, Pakistan’s Prime Minister Shaukat Aziz said both sides had agreed to move “very quickly” on the India-Pakistan-Iran pipeline project to iron out glitches including over transit fees. However days earlier, amid increasing international isolation of Iran, the Petroleum Ministry had prepared a note suggesting a way out for the Government: buy natural gas at the Pakistan-India border.

“In view of very low quantity (involved), 30 million standard cubic metres per day (MSCMD), India’s participation may not give any strategic advantage to India. Thus India can buy at Pakistan-India border and mitigate all risks through Gas Sales Agreement with Iran,” says the strategy paper.

“Since the mandate from the government is to buy gas at India-Pakistan border, it will be desirable that Iran should negotiate transmission tariff and transit fee with Pakistan and offer a composite price to India at Pakistan-India border.”

“This will be contractually a better proposition than India entering into a separate agreement with Iran for gas at Iran-Pakistan border and then a contract with Pakistan for transmission of gas and transit fee,” it says.

The rethink on project participation emerges from Iran’s denial to involve India or Pakistan in building the pipeline segment within its country. “With this the project gets reduced to Pakistan-India pipeline,” says the ministry.

Pakistan, on the other hand, is keeping mum on whether it would allow Indian participation in its pipeline stretch. “This will require political sanction...Even in India, it would require political clearance as the existing mandate is to buy gas at Pakistan-India border,” says the Ministry’s report.

... contd.