Associated Press

New Delhi, July 13:

Indian and Pakistani officials today tentatively agreed to start building a $4 billion pipeline late next year that would bring Iranian natural gas to India through Pakistan.

“The speed and the spirit with which we are going ahead, I understand work on the project can start in 2006,” Pakistan’s petroleum secretary Ahmed Waqar said after two days of talks.

The talks, which were held despite US objections to the deal, focused on financing the 2,775-km pipeline, pricing and sharing the gas, and security, Waqar said. He said both sides would meet again in late August, when they hope to adopt a ‘framework agreement’ on the project.

“This is the first time we have held detailed discussions on discussed the technical, financial and legal aspects of the project,” said Sushil Chandra Tripathy, India’s petroleum secretary.

Both sides have agreed to appoint international consultants to work out the details of project finances, Tripathy said. “I hope we can reach a financial closure by the end of 2006, or early 2007. After that it would take three, or three and half, years to get the pipeline ready.” Iran had proposed the project in 1996, but it stalled — mainly due to India’s reluctance to join because a large section of the pipeline would pass through Pakistan.

However, their relations have thawed since January 2004, reviving talks on the pipeline that would help India bridge its widening energy deficit and yield millions of dollars to Pakistan in transit fees.

The project faces new hurdles though, with the US voicing reservations and asking India and Pakistan to explore alternative energy sources. Washington has no diplomatic relations with Iran, and wants to keep international pressure on Tehran over its nuclear programme. But India and Pakistan have indicated plans to go ahead with the project.

“We would take a decision based on what our public interest demands,” he said.