Iran said on Wednesday that the proposed $4.16 billion Iran-India gas pipeline is closer to becoming a reality following the recent goodwill generated between India and Pakistan.
"The pipeline project looks closer than ever. I am very optimistic that the goodwill between India and Pakistan will further the prospects of the pipeline," Iran's Deputy Minister of Foreign Affairs in Economic Affairs Ali Majedi said at a conference on Iranian Gas Exports to Pakistan and India in New Delhi.
He, however, said security of gas supplies to India through the 2775-km pipeline, 760-km of which will pass through Pakistan, remained a key issue.
"But if India says all bilateral issues with Pakistan (like Most Favoured Nation status) need to be sorted out before the project is given a go ahead, I think you are losing an opportunity," he said adding Tehran had alternative markets in Europe and South East Asia to sell its vast gas reserves.
Iran has been pursuing the pipeline proposal, which will save India millions of dollars in energy cost, with New Delhi and Islamabad since 1996, but tensions between the two countries blocked any progress.
Majedi said international consortium of bankers and oil firms could build and operate the project.
Ken Bilston of BHP Billiton, which conducted the feasibility study of the pipeline, said worldover pipelines damaged by sabotage were repaired in 48 hours and there was no reason for concern over supplies for the Indian side.
Bilston said pipelines are very frequently blown up in Colombia and in a similar incident in Pakistan recently, the operations were restored within 48 hours.
"You need to build 3-4 weeks of emergency gas storage points. It will cost $200-300 million, a fraction of the pipeline cost, and will ensure uninterrupted supplies," he said.
Pakistan is expected to get $600 to $800 million annually in transit fee alone, a reasonable guarantee against any sabotage by it. Besides, motion detectors and satellite monitoring of the pipeline could be an insurance against any sabotage.
Storage tanks on Indian borders to stock at least 30 days of supplies may also be constructed for ensuring continuous supplies, he said.
Iran has already guaranteed to supply natural gas in ships at the same price as the piped gas in case of disruption.
BHP Billiton of Australia has done a feasibility study of the pipeline, which will connect Iran's gas fields at Assaluyah (South Pars -- located on the Iran-Qatar border) to India's main trunk line of Hazira-Bijapur-Jagdishpur.
$1.86 billion would be required to lay the 1115-km line from Assaluyah field in Iran to the Pakistani border while the 760-km in Pakistan will cost $1.20 billion. Another $1.10 billion would be needed for laying a 900-km pipeline from Indo-Pak border to the HBJ line.