U.S. Cautions India On Iran Pipeline Project

Dow Jones Newswires, AP:

The United States has cautioned India over an ambitious gas pipeline project with Iran while noting Washington's concerns about Iran's nuclear program, a newspaper said Thursday.

The Indian Express reported that U.S. Ambassador to India David Mulford conveyed Washington's concerns to Indian Petroleum and Natural Gas Minister Mani Shankar Aiyar, who received Cabinet approval last month to begin formal talks on the 2,775-kilometer pipeline, which would cut through Pakistan. read more

U.S. Embassy officials in New Delhi could not be reached immediately for comment on the report. ...

Aiyar is scheduled to visit Teheran in June to secure a formal deal. Iranian energy officials have said the pipeline could be operational by 2009.

The agreement would be for the delivery of gas in the Indian border state of Rajasthan, and New Delhi would not be responsible for the construction, maintenance or operation of the pipeline, nearly a quarter of which would pass through Pakistani territory, Aiyar has said.

Iran proposed the pipeline in 1996, but the project never took off, mainly because of shaky relations between nuclear-armed rivals India and Pakistan.

The pipeline project was revived as relations between the two South Asian neighbors improved over the past year. India and Pakistan now look at it as a key confidence-building step for their continuing peace talks.

Pakistan is eager for the project because it would also have access to the gas and earn an estimated US$600 million a year in transit fees if the pipeline extends to India.

India imports more than 70% of the crude oil it consumes and demand for oil is rising because of its rapidly growing economy. India will import 5 million tons of liquefied natural gas in 2005.

India's Cabinet has approved talks with Pakistan, Myanmar, Bangladesh, Turkmenistan and Afghanistan on possible pipelines through those countries to India.