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Pakistan may earn $500 million a year: Iran-India gas pipeline deal

Pakistan may be able to earn as much as $500 million a year if the proposed gas pipeline...

Pakistan may be able to earn as much as $500 million a year if the proposed gas pipeline transiting from Iran to Pakistan becomes a reality.

This is projected in this month's issue of South Asia Monitor, the journal of the South Asia Programme of the Washington-based Centre for Strategic and International Studies.

The journal points out that natural gas is India's fastest growing fuel source. Consumption has risen from 0.6 trillion cubic feet (tcf) in 1995 to 0.8 tcf in 1999, and is projected to grow at 6.5 per cent per year. India imports liquefied natural gas (LNG) from Oman to run the Dabhol plant, and plans to expand its LNG infrastructure.

In June, Indian and Iranian officials met to discuss a possible Iran-India pipeline that has been under discussion for many years. An overland route through Pakistan is likely to be far cheaper than an offshore project. A study estimates that a pipeline could eventually halve natural gas prices in India. Published estimates suggest that Pakistan could collect as much as $500 million annually in transit fees. But, the journal points out, Pakistan and India have both resisted becoming economically dependent on the other. A pipeline agreement that protected India, Pakistan, and Iran against politically-driven disruption of flows, however, could have both economic and political benefits.

Indian will also like to import gas from Bangladesh. Oil company experts' belief that substantial new resources are waiting to be developed is bolstered by a recent Petrobangla-US Geological Service survey.

The present government's policy precludes gas exports, and export to India is controversial. Once a new government is in power in Bangladesh after the October elections, "deft Indian diplomacy may be able to improve the odds for a favourable decision".