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Energy Sector - 2
<b><span style='font-size:14pt;line-height:100%'>Pipeline or pipe dream?

Dr Farrukh Saleem</span></b>


<b>Iran would love to sell some of its 79 billion cubic meters of gas to India. India, growing at a robust 7 percent a year, would love to buy cheap Iranian gas. Pakistan, in the middle of Iran and India, would love to let the pipeline pass through Balochistan and make up to half a billion dollars a year in transit fees.

So, where is the hitch?</b>

To begin with, there is the Iran Libya Sanctions Act (ILSA) of 1996. The Act allows the President of the United States to "penalise any company that invests more than $20 million per year in Iran's energy sector." The Act has an "extra-territorial" affect as it can penalise both Iran and any third nation or a corporate entity that violates the Act.

<b>For the record, the cost of the triangular deal is estimated at a colossal $4 billion (or more). The proposed pipeline passes through a quake-prone zone and shall, therefore, require an extraordinarily high degree of civil, chemical and information technological skills. Iran, India and Pakistan do not have the requisite skills and thus cannot execute the project without Western, Australian, Japanese or Russian participation. Russian companies may have the technology but not the financial resources. ILSA, in the meanwhile, prevents all foreign companies from using American licenses or patents. Additionally, most European credit agencies do not cover Iranian risks. European companies interested in Iran would thus have to seek private sector political risk insurance coverage, which would in turn increase the cost of doing business in Iran.

India, the end user, is not without her own reservations. "Security of supply" through restive Balochistan, arguably a narcotics heartland, was India's top concern before Iran stepped in to "guarantee supply" (even on the Pakistan-section of the pipeline). But, can Iran-or a consortium-actually guarantee supply through a third country? Influential quarters within India continue to insist that as India controls the headwaters of rivers, Pakistan may end up using the gas pipeline as a potent bargaining chip for concessions over water (and also over Kashmir).</b>

The other stumbling block is Iran's constitution that allows buy-back contracts and explicitly forbids profit sharing. International investors, with the risk of investing in Iran, would be more interested in a profit sharing rather than a buy-back contract. It is highly unlikely that the Ayatollahs will be wiling to amend the constitution for the sake of the pipeline.

To be certain, Iran's proposition of a 2,600-kilometer gas pipeline-if it ever gets built-will be one of the greatest engineering undertakings of the 21st century. Four billion dollars cannot be raised without Western participation and the actual construction poses an engineering challenge for which neither Iran nor India have the expertise.

<b>Can both India and Pakistan defy the hyperpower and stand up to ILSA? May be one of the two can, and even if they both decide to defy, they still cannot execute the project on their own (so why defy?).

The Iran-Pakistan-India tripartite gas pipeline is a pipe dream whose time hasn't yet come.</b>

<i>The writer is an Islamabad-based freelance columnist
Email:</i> farrukh15@hotmail.com


<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>"The Impending Decline of Saudi Oil Output" </b>
Michael Klare on a Saudi Oil Bombshell
[Prefatory comments by Tom Englehardt From: http://tomdispatch.com/
27 June 2005]

'Gujarat's gas find is a jackpot'

Now this is going to cause some severe indigestion to the enemies of Gujarat <!--emo&Tongue--><img src='style_emoticons/<#EMO_DIR#>/tongue.gif' border='0' style='vertical-align:middle' alt='tongue.gif' /><!--endemo-->

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Modi and his colleagues didn't want to miss that opportunity, which had great business potential.

So, amidst the Akshardham crisis, they increased the net worth of a then little known company, GSPC, by Rs 300 crores.

<b>"It was all done in flat 48 hours when Akshardham crisis was on,"</b> says Saurabh Patel, Minister of State for Energy and Petrochemicals.

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->On June 26, Modi announced that a state-run corporation had discovered the "<b>country's largest reserve of natural gas in the Krishna-Godavari basin</b>."
The energy specialists are already saying that the oil production has already peaked in the world. 2nd world war was fought to control the world reources for raw materials and hegemony over colonies.
Now the world is moving towards another world war this time over the Oil. One wonders that so much resources and funding s being poured in to the telecom industry when already what is available is not even used 5% by most people. It seems that there is no will of the scientist community to find an alternative to Oil.

Indian scientist should take initiatives in developing the solar energy as an alternative to oil energy in the world. India since the anciant time has been the worshipper of Sun. Developing solar energy as a viable alternative source to oil is the only way to evert another world war over control of oil.
<b><span style='font-size:14pt;line-height:100%'>Iran concerned about pipeline security</span></b>


<i>* Pakistan and Iran agree on trilateral talks involving India</i>

<b>ISLAMABAD: <span style='font-size:12pt;line-height:100%'>Tehran on Wednesday raised concerns over the security of the proposed US$ four billion Iran-Pakistan-India pipeline that would pass through Pakistani territory on its way India.</span>

Iranian Oil Minister Bijan Zanganeh held the gas pipeline’s first round of talks with Federal Petroleum and Natural Resources Minister Ammanulla Khan Jadoon. A senior official, who attended the meeting, told Daily Times that Iran was concerned about the security of a major part of the pipeline to be laid down in Pakistan. </b>He said that Jadoon assured the Iranian minister about security arrangements, saying, “It is Pakistan’s concern and Tehran should not get unduly worried about it.” Both sides will also talk on various issues related to the gas pipeline today (Thursday).

<b>Asking not to be named, the official said that both sides did not discuss Washington’s concerns over the project during the talks.</b> After the meeting, both countries’ ministers told Daily Times that they decided to hold trilateral talks at the ministerial and secretary level among the three stakeholders (Iran, Pakistan and India) instead of bilateral talks on the mega project.

Earlier, it was decided that the three countries would hold talks on the gas pipeline bilaterally and after that it would be held trilaterally, but during Wednesday’s meeting, it was decided that issues would be solved at a faster pace through trilateral talks.

Jadoon said a memorandum of understanding (MoU) in this regard would be signed between the two countries today (Thursday). Asked if Pakistan had discussed the price of gas with Iran, the minister said, “It is too early to discuss such issues.”

Petroleum and Natural Resources secretary Ahmad Waqar said that nothing was finalised in the talks and both sides would be able to reach a result after the talks at ministerial level. He said that both sides would discuss the pipeline’s laying down, transmission cost, security and transit fee today.

On his arrival here, the Iranian oil minister said, “I am hopeful that a Memorandum of Understanding (MoU) will be signed during the talks here, which will determine the major topics regarding the import of gas.” He said he would discuss the import of gas for Pakistan’s domestic consumption and the Iran-India gas pipeline project, adding that he hoped improving relations between Pakistan and India and the settlement of political issues would hole speed up work on the project.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Mudy Ji :</b>

Just found both the Articles :

<b><span style='font-size:14pt;line-height:100%'>Iran-India gas pipeline to cost over $7 billion</span></b> <!--emo&:furious--><img src='style_emoticons/<#EMO_DIR#>/furious.gif' border='0' style='vertical-align:middle' alt='furious.gif' /><!--endemo-->

July 13, 2005 16:49 IST

The Iran-Pakistan-India pipeline is likely to cost $7.4 billion mainly due to increase in steel prices.

The revised cost of the pipeline project, available with the Indian government is substantially more than the $4.16 billion cost estimated by BHP Bhiliton of Australia, who had conducted a pre-feasibility study of the pipeline for Iranian government some time back.

<b>The Indian government estimates that the project cost may go to as high as $8.16 billion if there is a 10 per cent escalation in raw material costs over the next five years when the project is slated for construction, sources said.</b>

The capex may come down $6.67 billion if there is a 10 per cent decrease in raw material cost.

The Indian side at the first India-Pakistan joint working group meeting suggested three options for building the pipeline.

It either wanted Iranian companies to own and operate the pipeline and deliver gas to India at the India-Pakistan border or a consortium of Iranian, Indian and Pakistani and international companies to own and operate the pipeline.

Under the third option, it proposed that India and Pakistan buy gas in Iran and transport it through a pipeline owned by international companies.

Also the earlier one :

<b>India, Pak make 'good progress' on gas pipeline</b>

July 12, 2005 12:28 IST
Last Updated: July 12, 2005 18:24 IST

<img src='http://in.rediff.com/money/2005/jul/12lead.jpg' border='0' alt='user posted image' />

<b>India and Pakistan on Tuesday reported good progress in talks on finalising framework and a timetable for building the $4.16 billion Iran-Pakistan-India gas pipeline.</b>

"A range of issues was discussed, including technical, commercial, financial and legal. All sets of issues were discussed in an open and candid manner. We have some understanding on most of the issues," Pakistan's Petroleum Secretary Ahmed Waqar told reporters at the end of first day of talks with India.

India's Petroleum Secretary S B Tripathy made a detailed presentation on the issues concerning the project. "Principles have been laid down. Good progress has been made and we are very satisfied," Waqar said, adding the talks will continue on Wednesday at the end of which a joint statement would be issued.

Waqar said the Islamabad meeting between Union Petroleum Minister Mani Shankar Aiyar and his Pakistani counterpart Amanullah Khan Jadoon was "more of broad indication of seriousness of parties concerned to take talks forward. This joint working group will lay down some milestones, timeliness and concrete steps to be taken for achieving the project."

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Cairn Energy's Indian reserves top 2.5bn barrels</b> <!--emo&:ind--><img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' /><!--endemo-->

Published: July 19 2005 03:00 | Last updated: July 19 2005 03:00

Cairn Energy, the independent oil company, said yesterday that oil reserves at its projects in Rajasthan, India, totalled more than 2.5bn barrels, and that production there would start at the end of 2007.

Cairn was briefly promoted to the FTSE 100 Index last year after finding oil in Rajasthan, the largest discovery in India for 22 years, and experiencing a quadrupling of its share price.

Note : As this is a subscription site will try and get hold of the full Article.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
From : Financial Times – 19 July 2005

<b><span style='color:red'>CAIRN ENERGY’S INDIAN RESERVES TOP 2.5 BILLION BARRELS</span></b> <!--emo&:ind--><img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' /><!--endemo-->

Cairn Energy, the independent oil company, said yesterday that oil reserves at its projects in Rajasthan, India, totalled more than 2.5bn barrels, and that the production would start at the end of 2007.

Cairn was briefly promoted to the FTSE 100 Index last year after finding oil in Rajasthan, the largest discovery in India for 22 years, and experiencing a quadrupling of its share price.

The group’s largest discoveries are in Mangala, Bhagyam and Aishwariya oil fields, in the north of the Rajasthan Basin. The company has said that the proven and probable reserves for these fields was 1.64 barrels, and that the first oil will be produced from Mangala at the end of 2007. The three Fields are expected to produce between 120,000 and 150,000 barrels a day. Cairn has a production agreement with Oil Natural Gas Corporation, India’s biggest oil exploration company.

Cairn yesterday added more information about its oil discoveries in the South of the basin, considered by the market to be less promising than those in the north. Added to the reserves from Mangala, Bhagyam and Aishwariya, the southern discoveries would push estimated reserves upto 2.5bn barrels, Cairn added.

Bill Gammell, Cairn’s chief executive, said that the southern reservoirs were lower quality but “we think they can have significant value”. An appraisal programme was under way to assess reserves and recovery factors in the south, Cairn said. “We have found a world class reservoir in the north, with high flow rates and very big reserves. The south is more like North America, where volumes are lower and more wells are needed,” said Mr Gammell.

Shares in the Edinburgh-based group rose to £13.87 yesterday. Analysts said Cairn’s trading update was positive, but did not contain much new information. The group said more details would be available with the release of its half year results on September 20.

E & O E <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Bush agrees to aid India's nuclear power program</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin--> A joint statement from Bush and Indian Prime Minister Manmohan Singh said <span style='color:red'>Bush will ask Congress to change U.S. law and will work with allies to adjust international rules to allow nuclear trade with India</span>.

"Cleaner energy resources, including nuclear power, are vital for the future of both our economies," Bush said after a meeting with Singh<!--QuoteEnd--><!--QuoteEEnd-->

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->If the new agreement is approved, U.S. firms could help build reactors and supply nuclear fuel in India, including at two reactors built by the United States at Tarapur. The United States still will not recognize India as a nuclear power state, however, because it has not agreed to the treaty.

To obtain U.S. support, India agreed to separate its civilian and military nuclear facilities, keep its nuclear technologies from states that do not have them and allow international oversight of the civilian program<!--QuoteEnd--><!--QuoteEEnd-->
<b><span style='font-size:14pt;line-height:100%'>Pakistan opposes India’s bid to buy gas directly from Iran</span></b>

<b>NEW DELHI: Pakistan has opposed India’s plans to buy gas through the proposed $7.4 billion Iran-Pakistan-India pipeline directly from Iran, saying that Tehran cannot own the gas in Pakistani territory.

India wants Iran to own the gas till the delivery point at Rajasthan border in order to underwrite any losses that may occur due to disruptions in the pipeline, PTI said.

Pakistan made it clear at the 1st Joint Working Group meeting here on July 12-13 that the involvement of the National Iranian Gas Export Co (the gas exporting firm) in Pakistani territory would be “difficult”, a senior official said.</b>

At the meeting, India suggested a 2,135-kilometre route for the pipeline along the thickly populated coastal areas in Pakistan to minimise the risk of sabotage. It wanted the line to be laid by either NIGEC or a consortium of Iranian, Pakistani, Indian and international companies.

But it wanted NIGEC to own the gas throughout the 890-kilometre pipeline stretch in Pakistan from Gwadar on Iran-Pak border to Umarkot - and deliver it directly at the Barmer district border in Rajasthan. New Delhi said that it wanted its obligations to remain with NIGEC alone.

The official said that Pakistan wanted India and Pakistan to buy gas from NIGEC in Iran and use the pipeline, which will be owned and operated by NIGEC and international, Indian and Pakistani firms.

Alternatively, the pipeline consortium can purchase gas from NIGEC at Assaluyah, the landfall point of gas from South Pars gas field in the Persian Gulf, and sell it to India and Pakistan at their delivery points.

New Delhi, the official said, wants the point from where Pakistan is to draw its share of some 60 million standard cubic metres per day (mscmd) of Iranian gas, to be closer to the India-Pakistan border.

“India has kept the option of joining the pipeline construction consortium open, but it wants the delivery of (90 mscmd of) gas at its border,” he said.

<b>New Delhi wants NIGEC to enter into a back-to-back agreement with Pakistan for the safe transit of gas through its territory and its delivery to India at the Indo-Pak border.</b> For the construction and operation of the pipeline, India suggested three options –by NIGEC alone, by a consortium comprising of NIGEC, GAIL India, Indian Oil Corp and Sui Gas of Pakistan, or by NIGEC and any other international company. Nni

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Iran-Pakistan-India gas pipeline: Balochistan opposition leader demands royalty</b>

<b>QUETTA: Kachkol Ali, parliamentary leader from the National Party and leader of the opposition in the Balochistan Assembly, demanded royalty for the province on the proposed Iran-Pakistan-India gas pipeline project on Thursday.</b>

Addressing a press conference at his chamber, Kachkol said that the proposed gas pipeline would be laid in Balochistan and it was the Balochistan’s right to get royalty.

<b>When asked whether it was appropriate for a federating unit to interfere in an international project, the National Party leader said it was not mentioned in the concurrent list, but international laws allowed Balochistan to demand royalty on the project and the federal government was bound to pay the royalty according to provincial rights.

Replying to a question, Kachkol said that India supported Balochistan for its rights. He quoted former Indian Foreign Minister Yashwant Senha as saying, “India must consider Balochistan’s rights in the gas pipeline project.”</b>

Federal and provincial governments have time and again accused Baloch nationalists of creating hurdles in the way of the Balochistan development, but Kachkol said it was only propaganda. He said the centre was least interested in developing Balochistan.

<b>“Our development demands were not met, but the development projects in the interest of the government were initiated immediately,” he said.</b>

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b><span style='font-size:14pt;line-height:100%'>Indo-Iran pipeline fraught with risks: PM</span></b> <!--emo&:thumbsup--><img src='style_emoticons/<#EMO_DIR#>/thumbup.gif' border='0' style='vertical-align:middle' alt='thumbup.gif' /><!--endemo-->

Washington, July 21, 2005

<b>Observing that the proposed multi-billion dollar <span style='font-size:14pt;line-height:100%'>Indo-Iran gas pipeline via Pakistan is fraught with risks, Prime Minister Manmohan Singh has said he did not know if any international consortium of bankers would underwrite the project.</span></b> <!--emo&:clapping--><img src='style_emoticons/<#EMO_DIR#>/clap.gif' border='0' style='vertical-align:middle' alt='clap.gif' /><!--endemo-->

"Only preliminary discussions have taken place (on the pipeline). We are terribly short of our energy supply and we desperately need new sources of energy. And that's why with Pakistan we have agreed to explore the possibility of the pipeline," he told The Washington Post on Wednesday when asked about the discussions on building a gas pipeline with Iran.

<b>"But I am realistic enough to realise that there are many risks because considering all the uncertainties of the situation there in Iran. I don't know if any international consortium of bankers would probably underwrite this. But we are in a spate of preliminary negotiations, and the background of this is we desperately need the supply of gas that Iran has," the Prime Minister said.</b>

Asked whether India can use its new relationship with the US to help the country on relations with Iran, Singh said: "We are entirely one with the rest of the world, that countries which take solemn international obligations, that they must honour those obligations...Our interest would be to work with other like-minded countries that a constructive solution can be found for the problems that Iran is expressing, that the world community is expressing about Iran."

<b>Singh, however, expressed hope that India could act as a bridge between US and Iran.
"We have strong civilisational links with Iran. Also, I would say that Iran is the largest Shia Muslim country in the world. We have the second largest Shia Muslim population in our country...And I do believe (with) that part of our unique history, we can be a bridge," he said.</b>

When pointed out that many people in the US are concerned about the proposed Indo-US civilian nuclear agreement because of the issue of nuclear proliferation, Singh said India's peaceful nuclear programme was not built by stealing other people's technology.

"We had this dream that it was better to work towards a world free of nuclear weapons and we had this dream of universal nuclear disarmament.

"We have been proved wrong and the result is we have seen in our neighbourhood reckless proliferation in disregard of all the international obligations. But although we have nuclear assets, our programme is totally under civilian control. <b>We are a democracy, there are enough checks and balances in our country, and we have an impeccable record of not contributing in any way to nuclear proliferation," he said.</b>

Well Done, Prime Minister!

<!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo--> Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Is MSA Upstaging the Prime Minister?</b>

<b>India negotiating with Pakistan to make pipeline safe: Aiyar</b>

<b>NEW DELHI: Indian Petroleum Minister Mani Shankar Aiyar said on Friday that New Delhi was negotiating with Islamabad to make the US7.4-billion Iran-Pakistan-India gas pipeline safe from all risks.

“The whole of this exercise for a safe and secure world class project is taking required measures to mitigate the risks involved,” Aiyar told reporters. He said the pipeline’s technical, financial, commercial and legal agreements would have safety and security dimension worked into the project structure. “Negotiations are on schedule that we had laid. We are working towards that,” he added.</b>

Meanwhile, Indian Petroleum Ministry sources said that India was moving ahead with plans to appoint global financial consultants for the proposed Iran gas pipeline project. Reports from Pakistan indicated a similar keenness to start the tri-nation project soon.

Sources said, “As agreed by the India-Pakistan Joint Working Group, we are moving ahead with plans to appoint global financial consultants just as Pakistan will be doing. Iran has already appointed financial consultants BHP Billiton.” India has hired global financial consultants with the objective of ensuring a “safe and secure pipeline,” said sources. They said the three countries did not have previous experience of a transnational pipeline project and India thought it was necessary to hire financial consultants to minimise risks. Agencies

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Is MSA Upstaging the Prime Minister? <!--QuoteEnd--><!--QuoteEEnd-->
He is still on "PYAAR HUWA IKRAAR HUWA HAI" mode. <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->
<!--QuoteBegin-Mudy+Jul 23 2005, 05:44 AM-->QUOTE(Mudy @ Jul 23 2005, 05:44 AM)<!--QuoteEBegin-->
He is still on "PYAAR HUWA IKRAAR HUWA HAI" mode. <!--emo&Big Grin--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo--> <!--QuoteEnd--><!--QuoteEEnd-->

<b>Mudy Ji :</b>


Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Mudy Ji :</b>

Regarding the Price of the Iran-Pakistan-India Pipe Line Cost Doubling :

Here is a - WORLD CARBON STEEL PRODUCT PRICE INDEX from 1997 Onwards :


I think Pipes are made from Hot Rolled Plate.

Would request the “Steel Gurus” for their inputs.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<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

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b><span style='font-size:14pt;line-height:100%'>OH MUMMY, THIS HURTS</span></b> <!--emo&Confusedtupid--><img src='style_emoticons/<#EMO_DIR#>/pakee.gif' border='0' style='vertical-align:middle' alt='pakee.gif' /><!--endemo-->

<b>Scuttling the pipeline project would be disastrous</b>

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Jindal Power & Essar Steel seek coal-to-gas tech</b>

Jindal Power and Steel and Essar Steel have approached SASOL for technology to convert coal to gas for use in their steel plants. The Indian companies are interested in the SASOL-Lurgi fixed bed dry bottom technology.

This yields synthesis gas, which can be used in place of natural gas (which Essar already uses for steel production). Natural gas prices in India are partially controlled, but may one day be totally decontrolled.

In that case synthesis gas from coal may prove much cheaper. SASOL does not licence coal-to-liquids (CTL) technology, but is willing to licence coal-to-gas (CTG) technology.

A standard CTG plant could suffice to feed a steel plant with a capacity of 1.7m tonnes/year.

Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>India or not, Pak to go ahead with Iran pipeline</b>
What they are going to do with surplus gas?

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