September 28, 2008

Iran-Pakistan Expedite Gas Pipeline Despite India’s Absence – Paper

Text of report by reformist Iranian daily E'temad-e Melli

Text of unattributed report by Economic desk headlined "Creation of the Peace Gas Pipeline Company by Tehran and Islamabad: Pakistan becomes the sole client of Iran's gas" published by Iranian newspaper E'temad-e Melli on 24 September

Despite the absence of India, negotiations about the construction of the peace gas pipe project are still the focus of discussions between Iran and Pakistan. Accordingly, the presidents of the two countries, presently attending the United Nations General Assembly in New York, they are trying to ignore India's absence in this project and put into practice the peace gas pipe project with a joint cooperation between the two countries. Therefore the two countries decided to take the necessary steps for raising the required funds for the implementation of the project. So it seems Tehran and Islamabad are determined to put the project on route despite the absence of New Delhi.

Pakistan and Iran agreed on Tuesday to accelerate the process of Iran-Pakistan 70bn Dollars gas pipeline project and founded a joint company for raising the required capital. The decision was made in a meeting between Asef Ali Zardari, Pakistan's president and Mahmud Ahmadinezhad Iran's president, on the sidelines of the 63rd UN General Assembly [meet] in New York. In the meeting the two presidents discussed an extensive range of issues between the two countries. They also emphasised on the establishment of a committee consisting of five high ranking authorities of both countries to finalise the gas pipeline project and coordinate the corresponding activities. The presidents also emphasised on the completion of the 2700 km pipeline project to transfer natural gas from Iran's South Pars field to Multan, Pakistan. The collaboration took place one day before the above negotiations and after the explosion in Islamabad, in which the Iranian authorities requested a change in the formula of determining gas prices and demanded security insurance in transfer of gas from Iran to Pakistan. This news was reported by informed sources and published in Islamabad's newspapers. Informed sources in Pakistan's Oil Ministry announced that following last Tuesday's explosion in Islamabad, Iran once again demanded the security guarantee of the peace gas pipeline.

Previously India had repeatedly posed the lack of security in implementation of the peace gas pipeline project as an excuse in delaying its decision in finalising the project. This time, Iran also expressed its concerns in this regard and demanded from Islamabad to ensure the security for the construction of this pipeline. Quoting informed sources in the Oil Ministry, Pakistan's newspaper Daily Times announced that Iran has asked Pakistan to include a paragraph in the gas sales agreement regarding the security measures. According to this clause, Iran can suspend the gas supply in case of security threats. The same Pakistani sources also said: "Pakistan has given Iran written assurance in this regard." However, after the suicide bombing in front of Islamabad's Marriot Hotel, Iran renewed its request in this regard. This request was made while sometimes ago the Russian RIA Novosti news agency published the news regarding India's delaying once again the construction of the peace pipeline.

Quoting what Gholam Hoseyn Nowzari, Iran's oil minister had told Bloomberg news network, Novosti announced that India is going to suspend the joint agreement of the three countries for the construction of the peace pipeline, probably under internal or external pressures. Quoting Nozari, the agency added that gas belongs to Iran and this country does not intend to beg countries which are in need of it. He also said: "Other neighbouring countries and Europe are ready to buy Iran's gas and there is no problem in its sale. Subsequent to what Iran's oil minister had said, and according to Mahmud Ahmadinezhad's insistence on implementation of the gas pipeline project, which in absence of India, its peace- making purpose had to be put aside, shows that despite New Delhi's delays, Tehran and Islamabad are determined to carry out the project. However there are still ambiguities regarding the calculation of gas price in Majlis Energy Committee and its probable cheap sale, and corresponding authorities participating in the negotiations have not yet presented any satisfactory answers in this regard.

Originally published by E'temad-e Melli, Tehran, in Persian 24 Sep 08.

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