TAP gas pipeline project not a substitute for India: UPA
Iran-India, Economics, 5/22/2006

With key United Progressive Alliance (UPA) ally CPI(M) objecting to India joining the Turkmenistan-Afghanistan- Pakistan (TAP) gas pipeline project, the government today said that the TAP project was not a substitute for the Iran-Pakistan-India (IPI) project but could only be an addition.

Amid growing uncertainty over the IPI project, New Delhi underlined the fact that its implementation would depend on economic and security factors rather than political ones, particularly since India's concern was the uninterrupted supply of gas from the Persian Gulf country.

"India joining the TAP does not mean substituting IPI. If IPI comes through, it will be a welcome addition," a PTI report said here quoting official sources three days after the Union cabinet cleared the way for India associating with the TAP project.

The UPA government's decision came amid Iran's toughening of stance with regard to the project, particularly its pricing, which it wants revised upward.

The CPI(M) expressed "serious reservations" against the decision to join the TAP project, saying it was not in India's interest and would put the 7.4-billion-dollar Iran-Pakistan-India gas pipeline project in the cold storage.

The sources said politics was not a consideration but that India was concerned about economic and security factors in the IPI project.

"We need to focus on economic and security factors. The decision will be determined by issues like price, security guarantees as we want uninterrupted gas supply," they said.

Meanwhile, amid reservations expressed by the US over the IPI gas pipeline, officials from Islamabad and Tehran held talks in Islamabad Sunday to discuss issues like pricing, trilateral framework and appointment of consultants to carry out feasibility studies. An Indian delegation is to join the talks today.

The talks will be converted into a trilateral affair as soon as Indian Petroleum Secretary M S Srinivasan, who heads a 10-member delegation, joins the two-day parleys today.

Officials said the talks would mainly focus on pricing and appointment of consultants to conduct feasibility studies and a trilateral framework.

The meeting will discuss whether a separate pipeline has to be laid for India in view of Pakistan scaling up its demand.

Meantime, Pakistani and Iranian experts on Sunday wrapped up their first round of talks on the multi-billion gas pipeline in Islamabad after discussing its technical, financial and legal aspects, officials said.

The meeting also considered issues concerning gas sales/purchase pricing, project structuring and the feasibility study on the project.

A two-day trilateral Working Group meeting on the Iran-Pakistan- India gas pipeline project will be held today, the statement said.
This will be the second expert-level meeting in less than a month to review progress on the $ 7.1 billion project.

The two sides met in the last week of April in Islamabad and discussed technical and financial issues focusing on finalization of a gas pricing formula.

A draft gas pricing formula sent by Pakistan to Iran based on the domestic gas pricing mechanism was discussed by the two sides in their latest talks.

If implemented, the 2,670-km pipeline will have 1,115 kilometers of it laid in Iran, 705 kilometers in Pakistan and 850 kilometers in India.

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