NEW DELHI, July 23: India’s oil minister said on Saturday a proposed gas pipeline from Iran across Pakistan was a risky venture that would be difficult to finance, but added talks on the $7 billion project should continue.

“The pipeline proposal is, as the prime minister stated, fraught with terrible risks,” Mr Mani Shankar Aiyar told a news conference.

Indian Prime Minister Manmohan Singh expressed concerns about the project during his visit to the United States this week, when President George Bush recognized India as a responsible nuclear state and promised cooperation with its civilian atomic power programme.

Some officials suggested India may abandon plans to import Iranian gas in return of a nuclear energy deal with the United States, which has expressed concerns over the Iran-India project because of its opposition to Tehran’s nuclear programme.

Mr Aiyar said the issues were not related. “I don’t think there is any connection between the two,” he said, but he added the project faced formidable challenges.

“In my view it is going to be extremely difficult to put together an international consortium which should be willing to finance this project,” he said.

The proposal to build the pipeline has been on the drawing board for years but uneasy relations between Pakistan and India have prevented any progress.

Indian officials said security for any pipeline was a concern because it would run across volatile areas of Pakistan where other pipelines have been attacked in the past.

Mr Aiyar said India should import piped gas as it faces a deficit of 200 million cubic metres a day in 20 years even if more gas was discovered in the country.

“It is essential that we continue the process of negotiations which, as the prime minister said, is at present at a very preliminary stage,” Mr Aiyar said.

India is also keen to develop nuclear energy, which meets only 3 per cent of its power requirement but the government aims to increase that to about 25 per cent by 2050.

Analysts said nuclear energy was an attractive option but it would take a long time to hit India’s demand for oil or gas.

Kirit Parikh, member of India’s Planning Commission, said nuclear energy was not a substitute for natural gas. “All the gas is not used to generate power. India needs more gas.”

—Reuters