KARACHI, Jan 3: A high-powered Iranian team is due here next month to seek security guarantees from Islamabad on the Iran-Pakistan-India Gas Pipeline Project.

The guarantees would be sought in the light of the discussions to be held between India and Iran leaders during Iranian President Mohammad Khatami’s visit to India which is due this month.

Authoritative sources told Dawn on Friday that the National Iranian Oil Company (NIOC) had expressed the view that signing of Turkmenistan pipeline had caused major changes in the Iran-Pakistan- India pipeline project.

“The position regarding the pipeline project will become more clear after our president’s visit to India,” the NIOC communication is reported to have observed and demanded that “by then your draft agreement needs to be in firmer form.”

Khatami had described the gas pipeline as the “pipeline of peace” and hoped that the multi-billion-dollar project would bring about peace and friendship in the region. Despite Pakistan’s assurance, India is still worried about the security of supplies.

The NIOC’s communication has also referred to the Iran-Pakistan Refinery Project, which is planned to be set up in Hub, Balochistan.

Informed sources said that the Iranian authorities were not happy on the levy of five per cent duty on the import of machinery and equipment in Pakistan. Besides, Iranian side has also taken up the issue of providing guarantee on the rate of return (ROR). The sources said that Iranians believed that this levy of import duty by Pakistan and guarantees on the rate of return issue had “hampered the progress of otherwise a viable project like Pak-Iran Refinery.”

According to sources Iranians discussed with Pakistan authorities the draft agreement on the refinery project on Dec 24. They are reported to have expressed reservations over few clauses pertaining to continuation of current policies and concrete assurances by Pakistan government.

“We have made our positions very clear that written incentives may not be changed by one side without the consent of the other,” the NIOC communication is reported to have pointed out without making any clear and specific reference to the budgetary levy of five per cent duty and rate of return issue.

Pakistan authorities are also reported to have sought some time to firm up assurances which can later be made part of the proposed agreement for refinery to be signed by the oil ministers of the two countries.

The sources said that during President Khatami’s visit to Islamabad, Shaukat Aziz, Advisor on Finance, had signed a Memorandum of Understanding with his Iranian counterpart regarding Iran- Pakistan-India gas pipeline, Pak-Iran Refinery and cross-border smuggling of subsidised Iranian petroleum products.

They said that all these matters will be taken up again early next month again when the Iranian team visits Islamabad.

The Interior Ministry and the Central Board of Revenue are reported to be preparing a brief on the issue of smuggling of subsidised Iranian petroleum products into Pakistan. This will be discussed early next month with the Iranian team.