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  • GAIL estimates that Iran-Pak-India gas pipeline to use 60 pct of US$7b cost for steel pipes

    The just concluded India-Pakistan bilateral secretary level talks held in Islamabad "were very useful and focused on technical issues. We were all on the same side with total commitment to the pipeline project," a senior petroleum ministry official, who was part of the joint working group, told media.

    "By November, the petroleum ministry will seek the cabinet nod on the project structure," the official said.

    With the security issues expected to be addressed through international best practices and participation of global consultants, the focus of both India and Pakistan has moved to technical, legal and financial issues.

    "By November, at least at the officers level, we should have had discussions on project structure and international best practices after receiving inputs on all aspects of the project in October," the official said.

    "Some time in November, the officers will have to meet at the trilateral level to discuss and finalise the quantity of gas, project specifications, project structure, the cost of gas and transportation tariff," the official said.

    Once the trilateral level talks begin, the negotiations on the price of gas and the transit fee to be paid to Pakistan will start.

    "Pakistan has agreed to share their studies on different routes for the pipeline. We have suggested Barmer or Jaisalmer in Rajasthan as the entry point for the pipeline to India," the official said.

    On the cost of the project, while GAIL (India) Ltd has revised its estimate to about $7 billion with steel pipes accounting for 60 percent of the cost, Pakistan has estimated a much lower cost.

    "The petroleum ministry is of the view that the pipeline project will be over $5 billion," the official said.

    Ahead of the next India-Pakistan joint working group meeting, a technical team from India is expected to visit Pakistan to discuss some of these issues.

    IndianOil has already appointed Ernst & Young as financial consultants for the ambitious project that has been in planning for over a decade, while GAIL is in the process of selecting the legal and technical consultants.

    The official said Pakistan is a few weeks behind India in the process of appointing financial, technical and legal advisors to the project from their side.

    On the Indian side, the brief given to Ernst & Young, which was represented at the Islamabad talks to get a feel of the issues, is to advise on the project structure and pricing and also on international best practices in pipeline projects.


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