Pak, Iran to ink IPI pipeline pact

Pakistan and Iran will sign two crucial agreements on the multi-billion dollar gas pipeline project that also involves India within two months.

A gas purchase pact and an inter-governmental framework agreement will be signed in two months by the two countries.

Pakistan will also engage an international consultancy firm to conduct a feasibility study on its section of the project. The firm will carry out a feasibility study within Pakistan's borders and submit a report by the first quarter of next year, Dawn News channel reported on Thursday.

Pakistan and Iran recently held two-day technical-level talks here on the gas purchase agreement and other legal aspects of the project.

A working group of Iran and Pakistan will meet in Tehran on December 17 to follow up on the technical talks.

"India is not a part of the dialogue at this stage but we hope it will join the discussions later," Pakistan's Foreign Office spokesman Mohammad Sadiq said on Wednesday.

Officials were quoted by Dawn News as saying on Thursday that 40 per cent of the construction of the pipeline within Iran had been completed to supply gas to Pakistan's eastern

provinces.

The channel quoted unnamed Iranian officials as saying they were still hoping to include India in the project.

Pakistan is considering two routes for the pipeline one from Quetta in Balochistan province to Rahimyar Khan in Punjab province and another to the southern port city of Karach via Sukkur in Sindh province. Three international energy majors  BHP Australia, Shell and Russia's Gazprom  are interested in building the pipeline within Pakistan.

The Pakistani section of the project is estimated to cost between $2.7 billion and $3 billion and is expected to involve the construction of 700 km to 1,050 km of pipeline.

The Iran-Pakistan section of the project is likely to start by mid-2008 and is targeted to be completed by 2012.

Indian government sources have said the country's participation in the project hinges on the transit fee charged by Pakistan for Iranian gas. They said the transit fee currently sought by Pakistan 'is too high'.

The sources also said there is 'little point in proceeding' with trilateral talks with Pakistan and Iran till the bilateral issue of the transit fee is sorted out with Pakistan.