NEW DELHI, Jan 14 (Agencies): India's oil minister yesterday denied a report that New Delhi may pull out of a seven-billion-dollar joint project to build a gas pipeline from Iran via Pakistan.
Mani Shankar Aiyar told the Press Trust of India that its earlier report quoting unnamed officials in the petroleum ministry, was "completely wrong".
"It is completely wrong to suggest that either I or any one in authority in India has advocated withdrawing from the Iran-Pakistan-India pipeline," he said before leaving Beijing, where he has been holding talks with Chinese officials.
"The story to this effect is completely misplaced. I deny this report," said Aiyar. "We stand fully committed to the Iran- Pakistan-India pipeline."
Last month India held talks with Iran-which has the world's second- biggest natural gas reserves-to review progress of the tri-nation agreement.
The two countries, along with Pakistan, have said they hope to conclude a deal by June.
India has said previously that construction should start in 2007 and the pipeline should be operational by 2011.
But the plans have sparked sharp opposition from Washington which accuses Iran of seeking nuclear arms and being a state sponsor of terror.
Earlier this month, the US said it was "absolutely opposed" to the pipeline.
Under its Iran-Libya Sanctions Act, Washington has barred US companies from investing in Iran's oil and gas industry.
It has said foreign companies investing over 25 million dollars in the sector would be denied business opportunities in the United States.
Report from New Delhi says: Apprehending adverse US reaction, India is unlikely to participate in building of the USD 7-billion gas pipeline project from Iran via Pakistan and instead may prefer buying gas at its border.
The Petroleum Ministry is veering around to this idea and may soon approach the Cabinet for a final decision, informed sources said. In a note being prepared for the Cabinet, the Petroleum Ministry has suggested that New Delhi enter into an agreement only with Iran for purchase of gas at its border. Tehran would have to court Islamabad for safe passage of the pipeline, uninterrupted supplies and delivery of gas at Indian border.
The ministry feels that setting up of an international consortium - comprising of state firms of the three countries and global energy majors - for construction and operation of the of the world's most valuable project could be a non-starter due to political and legal opposition from US, including the threat of invoking sanctions under ILSA.
The project, the note says, may be executed separately by the three countries in their own territories to protect the project from US sanctions. The natural gas would be supplied to India by a transnational pipeline on the basis of an India-Iran bilateral agreement which provisions 'supply-or-pay' and alternative supplies in case of disruptions.