Australia’s BHP Billiton
has already carried out a prefeasibility study. Engineering firms that are understood to have expressed interest in carrying out a more detailed technical study include Australia’s WorleyParsons
, Belgium’s Tractebel
and Germany’s Pipeline Engineering PLE
. A spokesman for India’s Foreign Affairs Ministry said a financial consultant had already been appointed.
‘We discussed the Iran-Pakistan pipeline in detail,’ Indian Foreign Affairs Minister Natwar Singh said. ‘There will be a meeting of the concerned ministers of the three countries to finalise a tripartite framework agreement by the end of the year.’
Such an agreement would include land purchase, Pakistan’s transit fee, the gas pricing mechanism and the pipeline’s capacity. Iran and India now have bilateral trade worth more than $4,000 million – a figure the ministers pledged to increase. Besides the pipeline, Tehran and New Delhi earlier this year signed a sales and purchase agreement for 7.5 million tonnes a year (t/y) of liquefied natural gas (LNG) in a deal that also included access to Iran’s upstream oil fields and downstream petrochemicals sector. However, the high cost and complexity of the LNG deal make it technically less attractive than a pipeline.
Indo-Pakistan relations are the main obstacle now blocking the line, although the countries have significantly improved relations in the past year. Any pipeline agreement would ultimately have to be approved by the Indian Defence Ministry.
The US has also asked India to back away from the pipeline to increase economic pressure on Iran. However, Indian Prime Minister Manmohan Singh has said he supports the project as a means of meeting India’s rapidly rising gas demands.
For its part, Tehran has long targeted energy partnerships with both India and China to compensate for more difficult relations with the West. Both countries provide natural markets for its oil, gas and petrochemicals and comprise important strategic allies. India sits on the board of the International Atomic Energy Agency and China is a permanent member of the UN Security Council.