NEW DELHI - The joint tri-partite declaration between Iran, Pakistan and India for the $7 billion plus natural gas pipeline project is likely to be delayed by at least six months.

Earlier, the declaration was expected to be signed by the end of this calendar year. However, New Delhi is now looking at beyond June 2006 for finalizing this agreement. Differences have also surfaced over the appropriate project structure for successfully implementing the project. A high level team of officials from Iran is visiting New Delhi from December 27-29 to hold further discussions on the tri-nation gas pipeline project. As per a petroleum ministry note, “BHP-Billiton (consultants to Iran) have conveyed that the Iranian side envisaged that in the possible absence of international political support for the project and difficulties in putting together an international consortium, the project could be split into three separate parts, with each country implementing its own part of the project”. However, New Delhi is against this fragmented project approach as it would make the project unbankable. “The development of a consensual position relating to project structure and arrangements is required to be incorporated in all aspects of the project to boost investor confidence,” as per the note. On the time-frame, it said, “Even if the discussions are pursued vigorously, this would take up to March 2006. After this, the proposal would go to the Cabinet for political approval in all three countries. This could take 4-6 weeks”. After political approval is obtained, the note anticipates that the tri-partite framework would be finalized in another one to one-and-half months. The petroleum ministry would again have to discuss the price of gas with the Iranian and Pakistani sides and then finalize the quantum of gas to be supplied. “Hence, most optimistically, we are looking at June 2006 for completion of various steps required to obtain the political sanction from the three countries,” the note concludes. PIN/Financial Express
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