Foreign Correspondence

[Amaunet]

Iran wants Pakistan Army to man gas line

* Says Pakistan should get $100 million for security
* Indian paper says US may impose sanctions on India over pipeline

NEW DELHI: Pakistani armed forces may be given a contract for the security of the 760-kilometre stretch of the Iran-India gas pipeline transiting through Pakistan for an annual fee of $100 million, Online quoted a senior government official as saying on Sunday.

The fee would be in addition to the transit fee Islamabad would earn for allowing the $4.16 billion pipeline to pass through its territory. At the meeting of the task force on the Iran-Pakistan-India gas pipeline in Tehran from May 2 to 4, Iran had proposed, “the entire security of the pipeline be handed over to the Pakistan armed forces for a fee of $100 million per year,” the official said. In the same meeting, Tehran rejected India’s demand for a delivered price of $2.25 per million British thermal units (mBtu) for the gas to be imported through the 2,600-km line.

“The Iranians told us that even if they assumed the well-head price of gas to be zero, the cost of gas at the Indian border would be over $2 per mBtu. Pipeline cost, transit fee to Pakistan and cost of security may alone total the price India is willing to pay,” Online quoted the official as saying.

Iran wanted a price equivalent to the price of liquefied natural gas (LNG) it is selling to New Delhi through a separate contract. India is buying 7.5 million tonnes per annum of LNG from 2010, the revised price of which would be close to $4 per mBtu. Indian Petroleum Minister Mani Shankar Aiyar is likely to discuss transit issues including the route, transit fee and security of the pipeline when he visits Islamabad next month.

Meanwhile, in a letter to India’s Ministry of External Affairs (MEA), the US Government has warned that it will impose the Iran and Libya Sanctions Act (also known as Kennedy D’Amato Act) on India in case it goes ahead with the pipeline, The Pioneer said on Sunday. The act, passed by the US Congress in 1996, triggers sanctions on companies that make new investments in Iran of more than $40m and significantly contribute to Iran’s ability to develop its oil and gas resources.

Though this can be a measure to restrict India’s entry in Iran for pipeline building, Petroleum Ministry officials were hopeful that the US would consider India’s energy needs and not impose the sanctions, The Pioneer said.

The US President can impose sanctions by disallowing US financial institutions from providing loans or credits to a sanctioned nation. The sanctions can also be imposed on financial institutions by denying them the right to serve as an agent of US Government repository of its funds or as dealer of its debt instruments.

If India is put under sanctions, it will be denied permission to participate in US Government procurement contracts, be restricted from exporting its goods to any US company and denied export-import bank assistance. agencies


http://www.dailytimes.com.pk/default.asp?page=story_23-5-2005_pg7_1