India says IPI feasible

Tue, 15 May 2007

Indian Minister Dinsha Patel says the Iran-Pakistan-India Gas Transfer Pipeline Project - the Peace Pipeline - is technically viable.

India's Minister of State for Petroleum and Natural Gas Dinsha Patel added, "The economic feasibility of the plan (for India) depends on the gas price suggested by Iran."

"The three countries intend to sign an agreement on the issue by the end of June," the official said.

"India has selected Ernst & Young as the financial consultant and the British ILF as the technical consultant for the preparation of a pre-feasibility report of the pipeline," he added.

"Iran has provided a formula for determining the gas price at the Iran-Pakistan border. New Delhi is discussing transportation tariffs and transit fees that must be paid to Pakistan for passage of the pipeline through its territory," he said.

Patel refused to comment on Iran's proposed price for export.

Some Indian officials say Tehran wants to sell natural gas to India and Pakistan at $4.93 per million BTUs, or $60 per barrel crude oil price. Transportation tariffs and transit fees would be added to this price.

The tripartite pipeline is proposed to be a 2,775 kilometer gas pipeline project that would deliver natural gas from Iran to Pakistan and India. The project is expected to take three to five years to complete and would cost $7 billion.