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Rediff.com  » Business » Iran-India gas pipeline to cost over $7 billion

Iran-India gas pipeline to cost over $7 billion

Source: PTI
July 13, 2005 16:49 IST
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The Iran-Pakistan-India pipeline is likely to cost $7.4 billion mainly due to increase in steel prices.

The revised cost of the pipeline project, available with the Indian government is substantially more than the $4.16 billion cost estimated by BHP Bhiliton of Australia, who had conducted a pre-feasibility study of the pipeline for Iranian government some time back.

The Indian government estimates that the project cost may go to as high as $8.16 billion if there is a 10 per cent escalation in raw material costs over the next five years when the project is slated for construction, sources said.

The capex may come down $6.67 billion if there is a 10 per cent decrease in raw material cost.

The Indian side at the first India-Pakistan joint working group meeting suggested three options for building the pipeline.

It either wanted Iranian companies to own and operate the pipeline and deliver gas to India at the India-Pakistan border or a consortium of Iranian, Indian and Pakistani and international companies to own and operate the pipeline.

Under the third option, it proposed that India and Pakistan buy gas in Iran and transport it through a pipeline owned by international companies.

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