India wants Iran gas at its door for payment

India is unwilling to pay for the Iranian gas transported through the proposed $7.6 billion Iran-Pakistan-India (IPI) gas pipeline unless it is delivered at the India-Pakistan border. Tehran is interested in delivering the gas at the Iran-Pakistan border, but New Delhi is concerned about its safe passage through the Pakistani territory in light of the growing terrorist activities across the border. Iran has expressed willingness to evolve a contractual mechanism for safe delivery of the gas to India. “India has to ensure that liability to pay for the gas supplied by Iran is directly linked with its delivery at the India-Pakistan border,” an official source said. The negotiators have the Cabinet’s mandate to seek delivery of gas at the India-Pakistan border. In February 2005, the Cabinet authorised the ministry of petroleum and natural gas (MoPNG) to engage in bilateral and multilateral negotiations with Iran, Pakistan, Bangladesh and other countries for laying trans-national natural gas pipelines.Iran has reportedly suggested a trilateral mechanism for ensuring gas delivery at the India-Pakistan border. But it may still not supply gas at the Pakistan-India border. “It has suggested contractual provisions (in the gas sales purchase agreement) among the three countries to ensure safe delivery of gas to India,” the source said. According to sources close to the development, India may construct and manage the IPI pipeline on the Pakistani side through a tripartite joint venture, but neither India nor Pakistan will be able to construct the pipeline in Iranian territory due to US sanctions. Legal experts have advised New Delhi against investing in Iran’s upstream development. “Development of the pipeline within Iran should be a separate project, compared to the pipeline extending from the Iran-Pakistan border to the Indian border,” a source said. New Delhi has adopted a cautious approach towards the 2135-km pipeline project on apprehensions of supply cuts arising out of geo-political factors. India, however, clarified that the nuclear deal will not impact the proposed pipeline.