( IRNA ) - The over USD 7 billion Iran-Pakistan-India (IPI) gas pipeline is likely to be built in parts with the three nations deciding to construct segments of the pipeline falling in their territory independently.
" Iran will build the pipeline segment in its territory and Pakistan will be responsible for construction of the section falling in its territory. Indian firms will lay the pipeline from the Indo-Pak border to their consumption centers," PTI reported here quoting a top Petroleum Ministry official.
India will enter into an agreement with Iran for purchase of gas at its border and responsibility will be fixed on Islamabad for safe passage of the pipeline, uninterrupted supplies and delivery of gas at the Indian border.
The official said that setting up of an international consortium, comprising state firms of the three countries and global energy majors, for construction and operation of the world's most valuable project could be a non-starter due to political and legal opposition from the US, including the threat of invoking sanctions under the Iran-Libya Sanctions Act (ILSA).
The project may be executed separately by the three countries in their own territories to protect it from US sanctions, he said. India will sign a "supply-or-pay" agreement with Iran with a provision on alternative supplies during disruptions.
With the three countries separately executing the project in their territories, the project will be protected from US sanctions and even enable American consultants and contractors to participate in portions of the project.
Iran will lay a 56-inch pipeline up to its border with Pakistan, from where the diameter will reduce to about 40- 48 inches to carry 60 million standard cubic meters per day of gas that will be split equally between India and Pakistan.
The official said India was likely to suggest a tripartite monitoring mechanism -- a technical committee made up of representatives of the three national gas companies to oversee technical aspects of the project and an officials committee to ensure smooth progress in different aspects of the project as well as a steering committee at the ministerial level that will address political and other issues.
India and Pakistan last month reached an agreement on the quality of gas to be transported through the pipeline in the initial phase, but differed on transportation charges and transit fee payable to Islamabad for using its territory.
The transport tariff proposed by Pakistan at the official level talks in Islamabad on February 22-23 was 2-2.5 times higher than India's expectations.
Differences also remained on the transit fee as both countries proposed different formulations.
Pakistan proposed USD 0.57 per million British thermal unit (MBTU) whereas India said it cannot be more than USD 0.15 per MBTU.
Technical level talks between the two sides over the next one-and-a-half months would try to reach a consensus on the route, transportation tariff and transit fee before a bilateral meet sometime in April 25.
If all goes well, a ministerial tripartite meeting in June may ink the pipeline deal.