India would likely rejoin IP gas pipeline project

Indian Minister of External Affairs Salman Khurshid says his country may rejoin the multi-billion-dollar pipeline projected to carry natural gas from Iran to India via neighboring Pakistan.

“If there is seriousness from all sides, we are ready to import natural gas from Iran and Central Asia through Pakistan,” Khurshid said in New Delhi on Wednesday.

He further noted that such regional projects could create “inter-dependencies”, and would compel both Pakistan and India to have a long-term cooperative relationship.

On May 4, 2013, Khurshid voiced New Delhi’s willingness to reenter negotiations over the IP (Iran-Pakistan) gas pipeline project.

Under the original agreement sealed between Iran and Pakistan, the first Iranian gas delivery to Pakistan should start by December 31, 2014.

The two countries are also responsible for the completion of the pipeline project within their territories, and if Pakistan does not fulfill its obligation to complete the pipeline on its side by the end of 2014, it will have to pay a daily penalty of USD 1 million to Iran until the project is completed. Iran has agreed not to penalize Pakistan for missing the deadline.

Iran has already built its 900-kilometer share of the pipeline on its own soil and is waiting for the 700-kilometer Pakistani side of the pipeline to be built.

The United States has long been threatening Pakistan with economic sanctions if Islamabad goes ahead with the pipeline project. However, the government of Pakistan has made it clear that addressing the country’s longstanding energy problems will be its top priority, and it has no plans to reverse the decision on the completion of the IP pipeline.

The IP pipeline is designed to help Pakistan overcome its growing energy needs at a time when the country of over 180 million people is grappling with serious energy shortages.

Iran and Pakistan signed an agreement over the construction of the IP gas pipeline, also known as the Peace pipeline, in 1995. Later, Iran made a proposal to extend the pipeline from Pakistan into India. In February 1999, an accord between Iran and India was signed.

But due to the US pressure, India withdrew from the project in 2009.