Energy Sector - 2

[Naresh]

<b><span style='color:blue'>WHO HAS HAD HIS EARS PINNED BACK THEN?</span></b>

<b><span style='font-size:14pt;line-height:100%'>India says Iran pipeline risky</span></b>

* <i>Pakistan can effectively deal with security issue: Jadoon</i>

<b>NEW DELHI: India’s oil minister said on Saturday that a proposed gas pipeline from Iran across Pakistan was a risky venture that would be difficult to finance, but talks on the project should continue.

“The pipeline proposal is, as the Indian prime minister stated, fraught with terrible risks,” Mani Shankar Aiyar told a news conference. Indian Prime Minister Manmohan Singh expressed concerns about the project during his visit to the US this week, when President George Bush recognised India as a responsible nuclear state and promised cooperation with its civilian atomic power programme.

Some officials suggested India may abandon plans to import Iranian gas in return of a nuclear energy deal with the US, which has expressed concerns over the Iran-India project because of its opposition to Tehran’s nuclear programme.

Aiyar said the issues were not related. “I don’t think there is any connection between the two,” he said, but he added the project faced formidable challenges.

“In my view it is going to be extremely difficult to put together an international consortium which should be willing to finance this project,” he said.

Indian officials said besides worries about relations with Pakistan, security for any pipeline was a concern because it would run across volatile areas of Pakistan where other pipelines have been attacked in the past.</b>

Aiyar said India should import piped gas as it faces a deficit of 200 million cubic metres a day in 20 years even if more gas was discovered in the country.

“It is essential that we continue the process of negotiations which, as the prime minister said, is at present at a very preliminary stage,” Aiyar said.

Separately, Pakistan said on Saturday that it could effectively handle the security of the proposed Iran-Pakistan-India gas pipeline.

Talking to IRNA, Petroleum and Natural Resources Minister Amanullah Jadoon said Islamabad was fully capable of effectively handling the security of the gas pipeline. The minister said the government had been looking after the 6,000-kilometer-long domestic pipeline network that provided gas countrywide. “We like India need gas and we know how to take care of inter-state projects and are committed to its security,” Jadoon added.

Asked to comment on a press report alleging that India was playing up the security concerns issue regarding the gas pipeline to dictate terms vis-a-vis its pricing.

The minister rejected the report, saying talks with India were progressing and that there was nothing to worry about. “We are satisfied with the talks with India and there is no problem or deadlock as such,” he added.

He parried a question about the possibility of providing international security guarantees on the proposed project, which experts say has the potential to trigger greater economic activity in the region. Jadoon said natural disruptions or an occasional mishap could happen anytime and anywhere. However, there was nothing to be concerned about the pipeline’s security, he added.

The minister also warned the parties concerned about certain elements trying to create confusion over the project that was profitable for all three countries. Agencies

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