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Pakistan backs proposed Iran-India gas line

Pakistan has no objection to a proposed Iran-India gas pipeline running through its territory, Pakistan's minister for commerce, industries and production told Reuters on Monday.

"We have no objection to the project," Abdul Razak Dawood, said in an interview.

"We have told the Iranians that we want to keep our options open to tap into the pipeline should we need gas."

The proposed route for shipping Iran's natural gas through a 2,500-km land-based pipeline via Pakistan for ultimate delivery to India has been bogged down mainly by politics.

The land option raises security issues for India, which has fought three wars with Pakistan, two over the disputed territory of Kashmir.

Running a deep sea pipeline from Iran to India is another alternative for transporting the gas.

Some analysts have said the estimated $3 billion overland route would be more secure and less expensive than the deep sea option provided multinational companies were involved.

Iran has the world's second largest reserves of gas but has failed to tap into export markets. Energy-starved India faces growing demand for natural gas.

Dawood said Pakistan was prepared to revive long-stalled talks on a 120,000 barrels per day refinery project with Iran, but said the terms must be more to Islamabad's liking.

"The project needs serious examination by both Pakistan and Iran," the commerce minister said. "We both have to take a serious look at the project to see if it is still economically viable."

The proposed $1.1 billion refinery -- first mooted a decade ago -- would be a joint venture between Pakistan's Petroleum Refining and Petrochemical Corp and the National Iranian Oil Company.

Islamabad initially had offered a 25 percent return on equity, but Dawood said that now seemed an unlikely option.

"The days are gone when you put a project up on guaranteed returns and subsidies," he said.

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