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India, Pak inch closer to gas export deal
Kabir Taneja  New Delhi | 29th Jun 2013

The deal will see India supply LNG via a 120 km long pipeline from Jalandhar in Punjab to Jallo near Lahore.

ew Delhi and Islamabad are close to inking a deal for the export of LNG-sourced gas from India to Pakistan.

Thanks to the enthusiasm of a section of Prime Minister Manmohan Singh's government to use energy for building a "peace constituency" in the neighbouring country, the deal will see India supply LNG via a 120 km long pipeline from Jalandhar in Punjab to Jallo, near Lahore via the Wagah border. The gas on offer by India will actually be imported from Qatar.

Pakistan, which is in the midst of a massive power crisis, needs more gas to generate electricity required for the ballooning demand by its new and growing middle class.

The new-old Nawaz Sharif government has recognised the power crisis in Pakistan and was one of the main topics of discussion during his election campaigns. The government has also recognised that it has to source more supplies of gas from wherever it can. It is also now an open secret in New Delhi that Manmohan Singh is very keen to leave "improved" India-Pakistan relations as part of his legacy after leading the UPA government for eight years.

However, challenges will remain the Indian Prime Minister's aim. A strong section of the Pakistan Army, the Inter-Services Intelligence (ISI) and the powerful Maulana lobby are dead against the import of gas from India.

"Bharat ki gas haram hai," a Lahore based cleric had declared a few weeks ago, according to sources across the border. New Delhi and Islamabad are however prepared to go ahead and sign the deal, despite challenges and internal resistance, mainly in Pakistan.

GAIL (India) Limited, which will supply the gas, has made all the arrangements for the deal, but GAIL wants a sovereign guarantee when it comes to payments from the importing company in Pakistan, the Inter State Gas Services Company. However, Pakistan is said to be dragging its feet on giving a nod to GAIL's guarantee demands.

Not everyone is convinced that this pet project of the Prime Minister is a smart idea and many in the power circles of New Delhi ridicule the project. "Who exactly is sovereign in Pakistan? The Sharif government, the ISI or the Army? Does anyone know?" asks a bureaucrat working with the Indian government.

 
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