Iran could replace India with China in the $7.4 billion Iran-Pakistan-India gas pipeline project or go ahead with a two-nation Iran-Pakistan pipeline.
"How long can we wait for India? It is not possible to wait eternally," Iran's Energy & Economic Counsellor in India, Ainollah Souri, told Business Standard.
While the pipeline deal was seen as "done" two months ago, when the tri-lateral meeting took place in New Delhi, India is perceived to be dragging its feet on the project since then. It has stayed away from the subsequent two meetings in which Iran claims to have covered a lot of ground with Pakistan.
Indian officials dismiss allegations of disinterestedness in the pipeline project.
"For us, the critical issue is the pricing of the gas at the India-Pakistan border (which requires resolution of the tricky issue of transit and transportation tariff). Only when that is settled does it make sense to move ahead with the project," said a senior official in the petroleum ministry.
There has also been speculation that India has backed out because of pressure from the US, which is not in favour of the pipeline. Indian officials, however, maintain that the real issue is the high landed-price of the gas, as well as the price revision clause that the Iranians want to introduce.
India, Pakistan and Iran had mutually agreed to a price of $4.93 per million British thermal unit (mBtu) for the gas from the South Pars field in Iran.
India will have to also pay a transit fee and transportation tariff to Pakistan, which will inflate the price at the India-Pakistan border to around $7 per mBtu, a price considered too high by India.
Iran has decided to take an aggressive stand with India since it claims to have no shortage of buyers for the gas.
"It is a sellers' market. There are long queues of customers waiting to buy gas," says Souri.
Iran is ready to export the gas, with 44 per cent of the pipeline already laid in the country. Also, 98 per cent of the overall pipes required have already been acquired.
Brushing aside questions on the technical and economic feasibility of a Pakistan-to-China pipeline through the Karakoram Pass, Souri said it was feasible, technically as well as economically.
India is a gas-deficit country with domestic production just enough to meet about half the demand for gas. However, the huge gas finds in the Krishna-Godavari and Mahanadi basins have led some planners to believe that India could be a gas-surplus country soon.
