India-Iran Gas Pipeline-Mashaee
The Islamic Republic of Iran had addressed concerns about the dlrs 7.4 billion Iran-Pakistan-India (IPI) gas pipeline project that India had raised in the form of a non-paper.
This non-paper was handed over to the Iranian side during President Ahmadinejad's visit to New Delhi on April 29. Iran had responded to the non-paper and its response has been conveyed to the Indian authorities.
"Among the concerns raised, the point at which Iran has to deliver gas to India was the most important issue. The president has agreed that the gas should be delivered at India's border with Pakistan," said Esfandiar Rahim Mashaee in an exclusive interview with a leading Indian English-language newspaper, 'The Hindu' published on Wednesday.
Rahim Mashaee, a vice president of Iran and head of Iran's Cultural Heritage, Handicraft and Tourism Organization (ICHHTO), also heads an apex committee on the Iran-Pakistan-India (IPI) gas pipeline.
He spoke about the Iranian perspective on the project and highlighted that Iran had addressed the concerns about the project that India had raised in the form of a non-paper.
This non-paper had been handed over to the Iranian side during President Ahmadinejad's visit to New Delhi on April 29. Iran had responded to the non-paper and its response has been conveyed to the Indian authorities.
"Among the concerns raised, the point at which Iran has to deliver gas to India was the most important issue. The president has agreed that the gas should be delivered at India's border with Pakistan." He added that Iran was now awaiting an expeditious response from India so that a new round of negotiations in a trilateral format, involving Iran, Pakistan and India, to finalize the project could commence at the earliest.
"The Indian side has said it is willing to pursue the case, but the timeframe is very important to expedite and finalize the project at the earliest."
He also spoke about the Iran's inclination to later extend the IPI pipeline to China, with India providing a transit corridor as the preferred option. Excerpts of the interview:
Q: "While the importance of the Iran-Pakistan-India gas pipeline to meet India's growing energy demands is apparent, India has raised concerns about the security of the pipeline. There is also a view in India that as a confidence building measure, Iran could take responsibility for the delivery of gas at the Pakistan-India border.
"Some of these concerns were raised in a non-paper, which was handed over to the Iranian side during President Mahmoud Ahmadinejad's visit to India on April 29. What is the progress in addressing these issues so far?"
A: "Iran considers the Iran-Pakistan-India (IPI) pipeline as a trilateral project whose main importance lies in its potential to expand Iran's relationship with Pakistan as well as India. We give this project importance not only on account of its economic aspects but also because of its political and strategic attributes.
"At first the progress on the project had slackened a bit, when the export of Iranian gas to Pakistan was in focus. Later President Mahmoud Ahmadinejad emphasised the need for expanding Iran's relationship with India. A decision was taken then to pursue the project in a trilateral format.
"As a result a committee was formed that included representatives of the foreign minister and the minister of petroleum. I was appointed to head this committee following a direct order from the president. So far several meetings at the level of experts have been held, and good progress has been made. The president subsequently paid a visit to Pakistan and India, nearly three months ago. During his stay he reiterated Iran's commitment to a trilateral format. This could become a four-cornered arrangement by not only involving Pakistan and India, but also with the inclusion of China at a later stage.
"Upon Dr. Ahmadinejad's visit to India, it was decided that in case India faced obstacles (involving Pakistan), Iran would deal with such issues with Pakistan and later with India. During the visit, the President of India Pratibha Patil, the Prime Minister Manmohan Singh, as well as the Minister of Petroleum and Natural Gas Murli Deora stated that India had a great demand for energy and New Delhi was very keen to finalize the project. During the president's visit, the Indian side suggested some points that Iran needed to review.
"These included questions about the source of gas, security of the pipeline through Pakistan and possibilities of Indian companies becoming joint venture partners, mainly in Pakistan. After returning from the visit, President Ahmadinejad said that the case should be finalized at the level of experts within a timeframe of 45 days.
"Consequently a (separate) expert committee was formed, which reviewed all the issues raised by the Indian side. Its response has been communicated to the Indian side. Among the concerns raised, the point at which Iran has to deliver gas to India was the most important issue.
"The president has agreed that the gas should be delivered at India's border with Pakistan. The second point was about the source of gas supplies. The sources have been specified, and this information has also been communicated. Further details regarding finalization of the IPI trilateral project needs to be negotiated. We are waiting for the Indian authorities and the Indian government to express their readiness for holding trilateral meetings."
Q: "Does Pakistan have any objection to Iran's decision to deliver the gas at the Indian border under the new format, and the possibility of Indian investments in Pakistan?"
A: "Apparently Pakistan has no objection to the delivery of gas at the Indian border. But they prefer to have further negotiations at the expert level. So far Pakistan is ready for further negotiations. It is waiting for the Indian government and the Indian authorities to express their readiness for further trilateral negotiations." Q: "What are the prospects of trilateral negotiations to advance the project to its next level?"
A: "The Indian side has said it is willing to pursue the case, but the timeframe is very important to expedite and finalize the project at the earliest. We believe that India has been made aware about Iran's negotiations with Pakistan and therefore it is fully in the picture.
"So far the reply from the Indian side is awaited. If no reply from India is received, the case will be pursued bilaterally with Pakistan and finalized at the first stage. Meanwhile, an avenue will be kept open for the Indian side to enter the project at any stage or at any time that it is willing do so. Since the project has been under consideration for over 12 years, and still not been finalized, we are really keen to expedite this case."
Q: "Could you elaborate on your comment regarding extending the pipeline to China?"
A: "We are looking at the possibility of exporting gas to China via India. It is better for India to seize this opportunity as this would mean that India will be in a position to avail transit charges, which will be a good source of revenue. It will also provide India an opportunity to create more jobs and also raise investments. It is therefore better for India to wrap up negotiations at the earliest and move forward. But if India does not expedite the case, and the committee (in Iran) comes to a point to when it becomes necessary to finalize (the project) with Pakistan, in that case the issue of gas pipeline transiting from Pakistan and China will come into play. In such an eventuality, India could lose the opportunity of benefiting from transit rights."
Q: "Has China been sounded or have any talks been held with China about the extension of the gas pipeline?"
A: "There have not been any negotiations but the Chinese have been sounded about the possibilities a long time ago. We are delaying (involving Chinese) intentionally since we are waiting for the Indian side to finalize the case."
Q: "There have been reports that after hard negotiations, it is now possible that India could get gas at around dlrs 5.68 per million British Thermal Unit. This includes the price charged by Iran and the transit and transportation fee that would have to be paid to Pakistan.
How far have we progressed on prices?"
A: "Prices are not a big issue and should be resolved soon. We will have consensus over it. Since the export of gas is a long-term issue, it has to be updated in line with the market price. The issue is not the price but the finalization of this project. The IPI is a very important project and it would yield economic and strategic benefits of the three countries. Naturally we have enemies. We have to recognize our enemies and do not let them influence our decisions." Q: "Have any negotiations been held to modify the route of the pipeline to minimize the security risk to the project on account of the turbulence in Baluchistan?"
A: "It all depends on the commitment of the three countries. These are rather technical and economic issues which needs further trilateral negotiations. The main objective of this committee (in Iran) is to convince and assist India to become an active partner in this trilateral project. The Iranian government has been emphasizing the active role and participation of India. In general, we were not satisfied with the performance of India in the past. However, after the visit of President Ahmadinejad to India and negotiations between Iran's Minister of Petroleum with his Indian counterpart, we hope that the things will improve."
