Repsol-Shell LNG Venture In Iran.

Repsol/YPF and Royal Dutch/Shell Group plan to invest $4 billion in an integrated natural gas E&P and LNG export project in Iran, Iran's Ambassador to Spain Morteza Alviri said Nov. 22. Persian LNG, as the project is known, is a joint-venture between Repsol, Shell and the National Iranian Gas Export Co. (NIGEC) - the latter being a subsidiary of National Iranian Oil Co. (NIOC).

Alviri said the partnership will source its natural gas from two offshore platforms which will tap the South Pars field. Persian LNG is targetting a production capacity 9.4 BCM/year by 2010. Alviri's remarks were made at a meeting of government and business officials from Iran and Spain.

Pakistan Revives Iranian Gas Pipeline Project; India Is Pondering: Indian Prime Minister Manmohan Singh and his Pakistani counterpart Shaukat Aziz, visiting New Delhi, on Nov. 24 said the peace process between the nuclear-armed neighbours was on track despite recent rough spots in their relations. Aziz, who was on his first visit to India since General Pervez Musharraf, Pakistan's military ruler, made him prime minister last July, said Pakistan hoped to go ahead with construction of gas pipelines from Iran and central Asia, whether or not India participated.

India, whose energy needs are growing by up to 8% a year, is concerned over the security risks of a $4 bn Iran pipeline that would cross Pakistan. But Aziz, a technocrat like Manmohan Singh, said the pipeline "would be a reality", with or without India. "Pakistan also has growing energy requirements," said Aziz.

"So Pakistan will go ahead anyway with this pipeline for its own uses", the Pakistani prime minister added. But Aziz insisted that India should consider the project as the gas will be "next door" and inter-dependence which such a pipeline will create between India and Pakistan will be another factor to lasting peace for the two neighbours.

Indian officials said there was more common ground than before on the gas pipeline, which would earn Pakistan between $600m and $800m a year in transit fees. India has linked the project to its request that Pakistan provide reciprocal transit rights for Indian goods to cross Pakistan to Afghanistan and central Asia.

"We are making progress", said one official. "The pipeline is no longer such an outlandish idea". The two prime ministers also agreed on the need to start a civilian bus service between Srinagar and Muzaffarabad, the respective capitals of India- and Pakistan-administered Kashmir, the disputed state which Islamabad insists is the core problem between the two countries. The bus service has been held up by India's demand that passengers would require passports to cross the Line of Control (LoC), the de facto ceasefire line that divides Kashmir. But Pakistan says this would amount to its acquiescence on treating the LoC as an international border - India's unofficial position. Aziz said senior officials from both countries would meet in December to iron out "difficulties on the travel documents".