Monday, March 10, 2008

Iran gas: China waits as India wavers

China is emerging as a potential partner in the proposed multi-billion dollar, 2,700-kilometer gas pipeline originally intended to link Iran, Pakistan and India.

Washington, at odds with Iran because of its perceived pursuit of nuclear weapons, has been hostile to the US$7.5 billion IPI pipeline and has urged India, considered a new strategic South Asian ally, not to go ahead with the project.

China, always on the lookout for new energy sources, has conveyed to Pakistan it would be willing to import 1.05 billion cubic feet (bcf) of gas per day if India opts out of the project, according to reports quoting officials in Islamabad.

Pakistan, which is smarting under Washington's decision to offer a nuclear-technology agreement to India but deny a similar deal to Pakistan, plans to import 2.2 bcf of gas a day from Iran through the pipeline.

Last month, a Pakistan Foreign Office spokesman said, "If there are prospects of China joining the IPI project with or without India,  we will welcome it. Pakistan is committed to the pipeline because of its desire to achieve energy security."

In similar vein, an Iranian Foreign Ministry spokesperson said in Tehran, "Other countries are eager for implementation of the [IPI] project. China is putting pressure that she wants to join the project. We don't have a lot of time. It is time to expedite the decision-making."

New Delhi is not taking the "China threat" very seriously, at least for now, with part of the argument being that India will pay more for the gas. An Indian official at the Petroleum Ministry said, "Going by China's past record, it is unlikely that Beijing will pay as much as Iran is likely to get out of India."

The official said Iran and Pakistan had "deliberately" introduced China as a possible party in the IPI to "pressurize" India, as it would be "politically unwise for India to let China walk away with the extra gas as has happened in Myanmar".

A gas purchase agreement has been finalized by Islamabad and Tehran that will be formally signed this month, while India has kept away from recent talks, citing various reasons, including political instability in Pakistan.

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