Saturday, December 17 2005 20:19 Hrs (IST) - World Time -

New Delhi: India and Pakistan today (Dec 17,2005) agreed to begin construction of the over 7-billion dollar Iran- Pakistan-India gas pipeline by mid-2007 so that the first gas flows by the end of 2010.

Initially, India will draw 60 million standard cubic meters per day from the over 2,100-km pipeline project and ramp it up to 90 mmscmd in next 2-3 years while Pakistan would start with 30 mmscmd and double its off take by 2013, Pakistan's Petroleum Secretary Ahmad Waqar said here.

The three countries, which till now have been meeting only bilaterally India has held talks with Pakistan and Iran separately and Pakistan with Iran separately will for the first time hold a trilateral meeting in early February 2006 in Tehran.

The meeting would address the issues relating to the project, including an integrated feasibility study, project structure and tri-partite framework agreement.

"The project structure (how the project will be built and operated) and the Framework Agreement (the agreement between India, Pakistan and Iran on the pipeline) will be finalized by April 2006," Petroleum Secretary S C Tripathi told reporters at the end of two-day meeting of the Indo-Pak Joint Working Group on the project here.

Ahmad Waqar, who led the Pakistani side a the third JWG, said a technical sub-working group would be set up to sort out issues like transportation tariff, transit fee payable to Pakistan, system configuration, pipeline route and pricing mechanism.

The sub-group would meet on a monthly basis to resolve the issue before the next JWG meeting in early March 2006.

"We have achieved good progress and we (will) continue to meet to finalize all outstanding issues. This project is essential for economic growth and energy security of both countries," Ahmad Waqar said.

Pakistan, he said, would appoint consultants in two weeks time to advise it on financial, technical, legal and commercial issues pertaining to the project.

India has already appointed financial and technical consultant and will in the next few days appoint a legal consultant.

Without the consultants, Islamabad did not respond to India's suggestion that the project be built and operated by state-owned companies of the three countries along with an international firm.

"We don't see any stumbling block. We are moving ahead and God willing, the project will see the light of the day," Ahmad Waqar said.

Tripathi said India needed the project for its energy security and was moving on it as per Prime Minister Manmohan Singh's advice.

"While Iran has identified certain blocks of gas in the gigantic South Pars field in the Persian Gulf, which would be dedicated to the proposed pipeline project, Tehran had also agreed to international certification of reserves," he said.

Ahmad Waqar said Pakistan had acceded the Energy Charter Treaty as an observer while Tripathi said New Delhi would do so once Cabinet clears the proposals.

Pakistan's Minister of Petroleum and Natural Resources would visit India in early February 2006 to review the progress in respect of the project.