Iran seeks changes in IPI pipeline

New Delhi: In a new twist to negotiations on the much-delayed Iran-Pakistan-India (IPI) pipeline, Tehran wants legal immunity in case of armed conflict disrupting natural gas supplies through the proposed line.

Iran wants changes to be made in the under-negotiation Gas Sales and Purchase Agreement (GSPA) with consuming nations, to insulate itself from payment of penalties in case of non-supply of natural gas due to armed conflict, government sources said.

The amendment to the force majeure clause is being opposed by New Delhi which wants Tehran to make alternate arrangements like shipping gas in its liquefied form (LNG), in event of disruption.

Negotiations on the $7.4 billion pipeline have been long and tedious with each side wanting to protect its interest and now, when most of the issues have been settled, the new condition would further delay an agreement on the project.

Sources said Iran has sent an amendment to the force majeure clause that sought to include its enforcement in situation(s) of armed conflicts or war. It wants the term Act of War under excusing event to be replaced by a suitable substitute such as situation of armed conflicts or war in the GSPA.

But, New Delhi is not willing to absolve Iran of its liability to pay for non-supply of gas in situations other than war. Iran, it says, has to commit to the principle of ‘supply-or-pay’ as the buyers are agreeing to ‘take-or-pay’ clause. India, sources said, also wants the ownership of the natural gas to be transfered to it at Pakistan-India border and Iran should be liable for safe passage of the fuel in Pakistan. India has said it will pay only if gas is delivered at its border.

Iran proposes to transfer ownership of the gas at its border with Pakistan and wants New Delhi and Islamabad to enter into suitable agreements for onward transit of the fuel.

New Delhi is also opposed to Iran’s insistence on revising the gas price every three years. It believes the pricing formula agreement between the three nations was for the entire 25-year tenure of the project.

India and Pakistan are to buy 30 million standard cubic metres per day of gas each from the proposed pipeline.