Wednesday, August 3 2005 14:17 Hrs (IST) - World Time -

New Delhi: Iran today (August 3, 2005) proposed signing a Memorandum of Understanding (MoU) with India for setting a timeframe for implementation of the long-delayed $ 7.4 billion Iran-Pakistan-India gas pipeline, but New Delhi appeared unwilling to enter into such an agreement until its security concerns were addressed.

Tehran, at the beginning of a two-day special Joint Working Group meeting on the pipeline, proposed an MoU, similar to the one it signed with Pakistan last month, setting a clear timeframe.

"We have proposed an MoU to have a clear timeframe between seller (Iran) and buyer (India)," National Iranian Gas Export Co (NIGEC) managing director R Javadi told to sources in Delhi.

Iran wants the project structure to be in place by December end and implementation mechanism and project financing model by April next year so as to begin work on the pipeline, that is to feed energy hungry markets in India and Pakistan, by second half of 2006. "We want to see project implementation in 2006," he said.

However, New Delhi was not willing to sign an MoU. "We already have Heads of Agreement between NIGEC on the Iranian side and GAIL/IOC on the Indian side. Most of the points they are proposing in the MoU are already covered in HoA," a top official in the Ministry of Petroleum and Natural Gas said.

India wants the project structure to be developed in such a manner so as to address all its concerns of safety of pipeline and safe delivery of gas.

Iranian Deputy Oil Minister Nejad Hosseinian said security issues would be discussed at JWG. "Security has been an issue...we have discussed (it before) and different groups are working on it."

Hosseinian said all project related issues would be discussed today and tomorrow with the objective of arriving at a project framework.

India and Pakistan, at another JWG last month, decided to appoint separate financial advisors to suggest project structure, legal arrangement, commercial deals and technical parameters.

The Iranian Minister, who called on Indian Petroleum Minister Mani Shankar Aiyar before the JWG, said: "We have set end of December as the deadline. we want India to expedite discussions (on project security and other issues) so as to start implementation of the project soon."

India, Iran and Pakistan have formed three separate JWGs- India-Iran JWG, India-Pakistan JWG and Pakistan-Iran JWG - and are presently engaged in bilateral discussions on the project. The three separate dialogues is expected to culminate into a tripartite deal sometime by end 2005 after issues with each of the three countries are addressed to their satisfaction.

"We will discuss in detail about the pipeline and its implementation," Hosseinian said.