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Last Updated: Monday, 6 June, 2005, 17:40 GMT 18:40 UK
India upbeat on Iran gas pipeline
India's Petroleum Minister Mani Shankar Aiyar and his Pakistani counterpart Amanullah Khan Jadoon
Mani Shankar Aiyar (left) with Amanullah Khan Jadoon
A project to pipe gas to India from Iran via Pakistan could begin next year, India's oil minister says.

Mani Shankar Aiyar was speaking at a news conference after talks with Pakistani officials in Islamabad.

The two countries agreed to co-operate in securing natural gas for their energy needs from external sources.

The pipeline project has long been discussed but never got off the ground, because of Indian security fears as the pipeline runs across Pakistan.

A joint working group will start working on the details of the multi-billion dollar pipeline next month.

"The pipeline may not be a reality as yet but it has at least become a certainty," Mr Aiyar told the press conference after meeting Pakistan Prime Minister Shaukat Aziz.

Mr Aiyar said India had held many ministerial and technical discussions with Iran over the last few months. Pakistani officials said they would soon do the same.

Mr Aiyar said he had been assured by Pakistani officials that all Indian reservations regarding the project would be dealt with.

The nuclear-armed neighbours have had tense relations in the past, but embarked on peace talks last year.

'Pipeline diplomacy'

The 2,600km (1,620-mile) landline would cost about $4bn and the supplies would be a huge boost for energy-starved India.

Any overland line to Iran will have to transit Pakistan

India's energy demands, both in oil and gas, are expected to double by 2020 as the country's economy grows rapidly.

The world's second most populous country produces only half the natural gas it uses and currently imports 70% of the crude oil it needs.

Record oil prices in recent months have hit India hard as a result.

The Indian government says natural gas imports will be needed if expected economic growth of 7-8% is to be sustained.

Three pipelines are under consideration - from Iran through Pakistan, from Turkmenistan through Pakistan and Afghanistan, and from Burma through Bangladesh.

Pakistan, Bangladesh and Afghanistan stand to reap millions of dollars in transit fees.

India has already signed a $40bn (21bn) deal to import millions of tonnes of liquefied natural gas from Iran.

Mr Aiyar dismissed US reservations over the purchase of gas from Iran and said Pakistan and India would not accept any pressure in this regard.

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03 Nov 04 |  Business
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27 Jan 03 |  South Asia
Bangladesh to consider gas pipeline
16 Jul 02 |  South Asia

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