ISLAMABAD, July 18: Pakistan, India and Iran are likely to firm up separate consortiums to develop 2670-km of gas pipeline in their respective territories for the delivery of Iranian gas to India, it has been learnt. Informed sources told Dawn that Pakistan-India joint working group which met in New Delhi a few days ago held preliminary discussions on the proposal. A final decision, the sources added, would be taken once the transaction structure developed further.

Initially, the two countries - Pakistan and India - would appoint their separate consultants to prepare structure for the formulation of consortia and other pros and cons of the pipeline project.

The estimated $4 billion pipeline would run about 1115-km in Iran, 705-km in Pakistan and 850-km in India. As such, Pakistan’s investment in the project would be around $1 billion to lay a 705-km pipeline from Iranian border to India border.

The sources said the Interstate Gas Company Limited which has been assigned the task of gas import pipelines was well placed to raise about $1 billion from the surplus liquidity available with the local banking sector against government guarantees.

The IGCL is a joint venture of Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) with a shareholding of 51 per cent and 49 per cent, respectively.

The sources said the SSGCL and SNGPL “have invested about Rs40-50 billion in the last five years” on their own to inject about two billion cubic feet per day (BCFD) additional gas in the system through new pipelines.

They said technical experts in India had no two opinions about the importance of the pipeline and the sovereign guarantees offered by Pakistan for its security within its boundaries under an international agreement.

During recent discussions, the Pakistani authorities were informed that the Indian authorities were convinced that a gas import plan was a must for its western cities like Haryana, Delhi and up to Uttar Pradesh because transportation of liquefied natural gas from Qatar and Iran through its southern cities to western part was not economically feasible.