By Khalid Qayum
April 25 (Bloomberg) -- India and Pakistan will aim to complete building a gas pipeline from Iran by December 2012, a project that the U.S. says may help finance the Middle Eastern nation's nuclear program.
Oil ministers of India and Pakistan agreed on the principles of the $7.4 billion project that's been delayed by more than a decade, counting on the pipeline to help meet their growing energy demands.
``Both countries realize the strategic importance of the project,'' Oil Minister Khawaja Muhammad Asif told reporters today in Pakistan's capital Islamabad today after meeting his Indian counterpart Murli Deora. ``This project, which is vital for our economies, will usher the people of Pakistan and India into a new economic era.''
The South Asian neighbors resumed talks on the 2,100- kilometer (1,300-mile) pipeline a month after a newly elected government led by Prime Minister Yousuf Raza Gillani took office in Pakistan. The U.S., seeking to isolate Iran due to the country's insistence in pursuing its nuclear program, wants India and Pakistan to pull out of the project.
India hadn't been able to agree with Iran on the price for the gas or the fees it will pay Pakistan for transporting the fuel. India said in September it needs to resolve certain issues with Pakistan before resuming talks on the pipeline, according to the Iranian Oil Ministry.
Iran Gas Sales
Iran, which has the world's second-largest oil and gas reserves, agreed to sell gas to India in 1995 to help ease shortages that strained utilities delivering power.
The U.S. is concerned that Iran may use revenue from the gas sales to fund its nuclear program, which the administration of President George W. Bush says may be a cover for building weapons. The Islamic republic denies the claim.
Bush is trying to keep up international pressure to block Iran's work on uranium enrichment. India rejected U.S. ``guidance'' on what to tell Iranian President Mahmoud Ahmadinejad when he visits New Delhi on April 29.
India should ask Ahmadinejad to suspend Iran's uranium enrichment program, end its interference in Iraq and stop supporting terrorist organizations, State Department deputy spokesman Tom Casey said on April 21.
The U.S. seeks to conclude an agreement on civilian nuclear-power technology that has run up against resistance in India. The agreement, which was signed by Bush and Indian Prime Minister Manmohan Singh in 2006, has been stalled by opposition from communists in India's coalition government, who say the terms will weaken the country's ability to follow an independent foreign policy.
Turkmenistan Pipeline
The U.S. has lobbied for a gas pipeline from the former Soviet republic of Turkmenistan through Afghanistan. India yesterday agreed to join the Turkmenistan-Afghanistan-Pakistan pipeline project to transport fuel to the world's second-fastest growing major economy by 2014.
India and Pakistan plan to form a company that will start building the Iran pipeline next year, Asif said. Agreement has been reached on the principles on which the project will go ahead, Deora said.
India's current gas supplies of 85 million cubic meters a day, including imported liquefied natural gas, falls short of potential demand of 170 million cubic meters, according to Oil Ministry estimates. Demand may quadruple to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7 to 8 percent a year, according to the ministry.
Pakistan produces about 4 billion cubic feet of gas a day, which is enough to meet current domestic demand. The nation needs to increase supplies to meet a shortfall in two years as the economy is expected to grow an average 7 percent in the next four years.
To contact the reporter on this story: Khalid Qayum in Islamabad at kqayum@bloomberg.net.
April 25 (Bloomberg) -- India and Pakistan will aim to complete building a gas pipeline from Iran by December 2012, a project that the U.S. says may help finance the Middle Eastern nation's nuclear program.
Oil ministers of India and Pakistan agreed on the principles of the $7.4 billion project that's been delayed by more than a decade, counting on the pipeline to help meet their growing energy demands.
``Both countries realize the strategic importance of the project,'' Oil Minister Khawaja Muhammad Asif told reporters today in Pakistan's capital Islamabad today after meeting his Indian counterpart Murli Deora. ``This project, which is vital for our economies, will usher the people of Pakistan and India into a new economic era.''
The South Asian neighbors resumed talks on the 2,100- kilometer (1,300-mile) pipeline a month after a newly elected government led by Prime Minister Yousuf Raza Gillani took office in Pakistan. The U.S., seeking to isolate Iran due to the country's insistence in pursuing its nuclear program, wants India and Pakistan to pull out of the project.
India hadn't been able to agree with Iran on the price for the gas or the fees it will pay Pakistan for transporting the fuel. India said in September it needs to resolve certain issues with Pakistan before resuming talks on the pipeline, according to the Iranian Oil Ministry.
Iran Gas Sales
Iran, which has the world's second-largest oil and gas reserves, agreed to sell gas to India in 1995 to help ease shortages that strained utilities delivering power.
The U.S. is concerned that Iran may use revenue from the gas sales to fund its nuclear program, which the administration of President George W. Bush says may be a cover for building weapons. The Islamic republic denies the claim.
Bush is trying to keep up international pressure to block Iran's work on uranium enrichment. India rejected U.S. ``guidance'' on what to tell Iranian President Mahmoud Ahmadinejad when he visits New Delhi on April 29.
India should ask Ahmadinejad to suspend Iran's uranium enrichment program, end its interference in Iraq and stop supporting terrorist organizations, State Department deputy spokesman Tom Casey said on April 21.
The U.S. seeks to conclude an agreement on civilian nuclear-power technology that has run up against resistance in India. The agreement, which was signed by Bush and Indian Prime Minister Manmohan Singh in 2006, has been stalled by opposition from communists in India's coalition government, who say the terms will weaken the country's ability to follow an independent foreign policy.
Turkmenistan Pipeline
The U.S. has lobbied for a gas pipeline from the former Soviet republic of Turkmenistan through Afghanistan. India yesterday agreed to join the Turkmenistan-Afghanistan-Pakistan pipeline project to transport fuel to the world's second-fastest growing major economy by 2014.
India and Pakistan plan to form a company that will start building the Iran pipeline next year, Asif said. Agreement has been reached on the principles on which the project will go ahead, Deora said.
India's current gas supplies of 85 million cubic meters a day, including imported liquefied natural gas, falls short of potential demand of 170 million cubic meters, according to Oil Ministry estimates. Demand may quadruple to 400 million cubic meters a day by 2025 if the economy grows at the projected rate of 7 to 8 percent a year, according to the ministry.
Pakistan produces about 4 billion cubic feet of gas a day, which is enough to meet current domestic demand. The nation needs to increase supplies to meet a shortfall in two years as the economy is expected to grow an average 7 percent in the next four years.
To contact the reporter on this story: Khalid Qayum in Islamabad at kqayum@bloomberg.net.
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