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Sun 1 Jul 2007 10:42 AM

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India-Iran gas deal in pipeline

A $7.4bn supply via Pakistan could start in 2011 once pricing issues are resolved.

Iran could begin transporting natural gas to India via Pakistan by 2011 through a $7.4 billion pipeline that is set to supply energy to the fuel-deficient countries.

Iran has invited representatives from both countries to Tehran to continue talks and sign the tri-nation deal by July end or August, according to the official Islamic Republic News Agency (IRNA).

"The gas supply will start in 2011," AFP quoted Iranian oil ministry spokesperson H. Ghanimi Fard as saying yesterday.

He added that nearly 18% of the physical work on the pipeline in Iran has been completed.

The comments came after representatives from India, Iran and Pakistan met in New Delhi for a second day on Friday amid reports that they were getting closer to the tripartite pipeline deal.

However the three countries failed to reach an agreement on delivery costs.

The Petroleum Secretaries of India and Pakistan have so far held two rounds of talks to resolve their differences on transportation charges and transit fee that India would have to pay Pakistan - which suffers from electricity shortages - for using its territory.

India will pay Pakistan the transport tariff it requested of 0.70-0.75 dollars per million British thermal units but the two countries are yet to agree on transit fees, AFP reported.

"We are confident of resolving all issues by next month," India's petroleum secretary M.S. Srinivasan said.

The 2,600-kilometre (1,600-mile) pipeline from Iran's giant South Pars gas field will initially carry around 60 million standard cubic metres of gas per day. It will have an annual capacity of at least 21.1 billion cubic metres.

There have been strong objections to the pipeline from the United States, which is striving to isolate Iran over its nuclear programme. However Iran and Pakistan are both determined to implement the project despite pressures from outside the region.

India imports 70% of its energy needs and has been striving to secure new supplies of oil and gas from abroad to keep up with its rapidly developing economy.

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