IPI remains pipedream for the time being

New Delhi, July 2:

The much-hyped Iran-Pakistan-India (IPI) gas pipeline project has again hit roadblocks and doubts are surfacing if it will ever become a reality. Despite reassuring words by India’s petroleum minister Murli Deora, Iran’s insistence on revising gas fees every three years has created worries for the partner countries.

The issue of transit fees to be paid by India to Pakistan is already a nagging sore which is yet to be resolved. In addition, Iran is believed to be going slow on providing any exploration and production plans for gas supplies to the project. Policymakers who appear gung-ho about the project in public are privately indicating concern about Iran’s failure to provide any data about the source of supplies as well as its tough stance on the pricing issue.

The $7 billion gas pipeline project has been viewed as the panacea for India’s energy drought but it may meet the same fate as the earlier Oman-India pipeline project.

Even that project had faced the same question marks on security and technical issues as the IPI one and it ultimately ended with Oman declaring that it had committed its gas reserves for supply to other countries.

The pattern looks set to be repeated with the latest tiff over gas pricing with Iran. In case Iran insists on revising prices every three years, it will not be possible for India and Pakistan to enter into any agreement.